Alice asks Supreme Court for CBM clarity

Alice Corporation, embroiled in a patent dispute with CLS Bank, has asked the US Supreme Court to clarify whether computer-implemented inventions can be patented.

It comes four months after the US Court of Appeals for the Federal Circuit failed to rule whether Alice could patent claims to electronic financial transactions. The 5-5 ruling meant an earlier decision dismissing the patents as invalid was upheld.

In a writ of certiorari filed on September 4, Alice, which operates derivatives markets, presented one question to the Supreme Court:

“Whether claims to computer-implemented inventions – including claims to systems and machines, processes, and items of manufacture – are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court?”

The case was brought by CLS Bank, a provider of foreign exchange markets, in 2007. A US district court later held several of Alice’s patents were invalid before the Federal Circuit reversed that decision but sent it for a re-hearing en banc.

In May this year, the Federal Circuit issued six separate opinions spanning more than 125 pages. Seven judges agreed that Alice’s claims were not patent eligible, but a majority of those judges could not agree on the legal rationale for that conclusion.

As a result, claims Alice in its Supreme Court filing, “the legal standards that govern whether computer implemented inventions are eligible for patent protection under section 101 remain entirely unclear and utterly panel dependent”.

It adds: “The uncertainty that now plagues – and will, absent this Court’s intervention, continue to plague – the patent system will cause severe harm and waste for innovators and litigants, as well as lower courts and the Patent and Trademark Office.”

A Supreme Court review would bring “much-needed clarity to the application of section 101 to computer-implemented inventions”, Alice said.

The Court has already been asked by online gaming company WildTangent to clarify when a patent’s reference to a computer or computer-implemented service is sufficient to make an unpatentable abstract concept patent eligible under section 101.

WildTangent’s filing in August followed a Federal Circuit ruling that an Internet and computer-based method for monetising copyrighted products was patent eligible.

Paul Schoenhard, counsel at Ropes & Gray LLP, said in Alice and WildTangent the Supreme Court has been offered two great opportunities to clarify the law of patent eligibility for computer-implemented ideas.

“Although the court may be reluctant to take on another section 101 patent eligibility case (having issued three decisions on the subject in the last four years), it is imperative that further clarity be brought to this issue and that stability be restored in the high-tech patent community. The software and consumer electronics industries need stability in patent law.”

To come to a decision in Alice or WildTangent, he said, the Supreme Court would need to find a balance between the long-term need for patent law to account for, accept and support new modes of technological innovation, and the “immediate need” to clarify the law of patent eligibility for computer-implemented ideas.

If the court accepts the case, legal arguments are expected to begin later this year.