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US Supreme Court Will Review Alice Corp. v. CLS Bank Regarding Patentability of Computer Software

On December 6, 2013, the U.S. Supreme Court agreed to review the Federal Circuit's en banc decision in CLS Bank Int’l v. Alice Corp., 717 F.3d 1269 (Fed. Cir. 2013) concerning whether computer-implemented inventions – including method claims, computer-readable media claims, and system claims – are patent-eligible subject matter. See Alice Corp. Pty, Ltd. v. CLS Bank Int'l, U.S., No. 13-298 (Dec. 6, 2013).

Petitioner Alice Corp. framed the issue as follows: "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 en banc Federal Circuit issued a per curiam opinion in which there was no majority rationale. Five separate opinions were issued. In addition, while the district court decision that the asserted method and computer-readable media claims are ineligible for patent protection was affirmed; the Federal Circuit was split over whether the system claims were ineligible for patent protection.

The patent-in-suit was directed to a computerized trading platform for exchanging obligations in which a trusted third party settles obligations between a first and second party so as to eliminate “settlement risk.”