Today, the Supreme Court in Alice Corp. v. CLS Bank unanimously held that all of Alice’s asserted claims were drawn to patent-ineligible abstract ideas. The Court reaffirmed the framework established in Mayo v. Prometheus for determining whether a claim contains one of the implicit exceptions to patent-eligible subject matter: laws of nature, natural phenomena, and abstract ideas.
Under Mayo, the Court must first “determine whether the claims at issue are directed to one of those patent-ineligible concepts.” If the claim contains a patent-ineligible concept, then the court must determine whether the additional elements “transform the nature of the claim” into a patent-eligible application, through an “inventive concept,” which is an element or combination of elements “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.” The Court held, “merely requiring generic computer implementation fails to transform [ineligible matter] into a patent-eligible invention.”
The Court held Alice’s claims were drawn to the abstract idea of intermediated settlement: mitigating the “risk that only one party to an agreed-upon financial exchange will satisfy his obligation.” It is an abstract idea because it is a “fundamental economic practice long prevalent in our system of commerce,” similar to the concept of “risk hedging” found to be an abstract idea in Bilski v. Kappos. Then the Court held that each claim does no more than require a generic computer to perform generic computer functions, and the recited hardware in the claims fails to “[offer] a meaningful limitation beyond generally linking the use of the methods to a particular technological environment.” The Court distinguished its prior decision in Diehr, noting that the claims there were patent-eligible not because of a computer, but “because they improved an existing technological process.”
Section 101 of the Patent Act does not explicitly proscribe laws of nature, natural phenomena, or abstract ideas. But the Court has now “interpreted § 101 and its predecessors in light of [these implicit] exceptions for more than 150 years.” Unless Congress acts, determining patent-eligible subject matter will continue to involve a complex analysis of those 150 years of precedent.