Technology; Alice Corp Pty. V. Cls Bank
By Neesa Peak
Alice Corp Pty. v. CLS Bank Int’l. is a supreme court case that deals with patent law. It is part of a much longer legal analysis of what is patentable, in particular, what things are patentable regarding computers and software. It built on supreme court decisions that had come before it especially the decision in Bilski v. Kappos, and helped to define more clearly what is not patentable. It does not resolve the discussion, if anything it helps to keep it open, but it does add context and information.
Alice Corp had patented a form of third-party guarantee system for computerized financial transactions; CLS Bank claimed that this system was simply an abstract intellectual concept, making it ineligible for patenting. Both parties went to court. Alice v. CLS Bank went through multiple different contradictory court rulings before reaching the supreme court. The district court said Alice’s claims were ineligible for patents, the Federal Circuit court overturned this decision and the court of appeals agreed with the district court.
The supreme court affirmed the court of appeals ruling, citing its previous ruling in Bilski v. Kappos in 2010. While the method that Alice Corp had patented included a detailed set of instructions and required the use of a computer, the court held that it was not in fact a patentable innovation, but really an abstract idea and therefore not patentable.
This ruling is particularly noteworthy for software patenting because it discusses in some detail how algorithms relate to patent terms. In the eyes of the court, algorithms and the strings of code that make them up are comparable to abstract ideas in other areas of patent law and therefore ineligible for patenting. The effects of algorithms and algorithms that are technological, scientific or industrial innovations are potentially patentable. The court did its best to walk the line between protecting the work of software engineers and other patent holders and blocking off necessary building blocks for new innovations.
Sources:
“Alice Corporation Pty. LTD., Petitioner v. CLS Bank International, Et Al. 13-298, U.S. (2014). https://www.justice.gov/osg/media/206941/dl?inline