November 21, 2014

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November 18, 2014

En (many) Banc(s) Federal Circuit Decides CLS Bank v. Alice Corp.

On May 10th, the Federal Circuit issued a short per curium opinion affirming the district court’s decision that “a majority of the court affirms the [holding below] that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 USC s. 101. An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.” On page 2, the “majority’ writes:

“While Chief Judge Rader is correct to note that no single opinion issued today commands a majority, seven of the ten members, a majority of this en banc court have agreed that the method and computer readable medium claims before us fail to recite patent-eligible subject matter. In addition, eight judges, a majority, have concluded that the particular method, medium and system claims at issue [for reducing the risk of non-performance of an agreement between two parties by using a trusted third party to hold the pot] – in this case should rise or fall together in the s. 101 analysis.”

Not a promising overture to this legal opera. A novelette of five concurring, concurring-in-part and dissenting-in-part(2), concurring-in-part and dissenting opinions and even “additional reflections” (by Chief Judge Rader) follows and I certainly have not consumed all 140+ pages of that content by any means.

The opinion begins with a 38 page concurrence by Judges Lourie, Dyk, Prost, Reyna and Wallach. In my post on this appeal in October, I summarized the “facts of the matter” and emphasized the tension between Cybersource v. Retail Decisions (no patents for mental processes that can be performed with pencil and paper and no Beauregard claims either) and Ultramercial v. Wild Tangent, where an 11-step process to distribute copyrighted products via the internet was found to be patent-eligible, in part due to its “intricate and complex computer programming” and specific application of the internet in a cyber-market environment. On one side, you end up on the slippery slope of defining an abstract idea. On the other, you are faced with arguing that a rock with e = mc2 carved into it is patentable. So I was more than a little interested in how this tension would play itself out (or if it would).

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