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Insights From the CLS Bank Argument

Alice Corp v CLS BankSupreme Court Considers Patentable Subject Matter Eligibility…Again

The closely watched case of Alice Corp. v. CLS Bank was argued before the Supreme Court of the United States this past Monday. The Court is not expected to radically depart from their significant precedent on patentable subject matter. Yet, the decision will be especially relevant to Covered Business Method (CBM) challenge proceedings before the USPTO’s Patent Trial & Appeal Board (PTAB). Below are some thoughts on the oral argument from my partner Michael Kiklis. Mike has recently authored the treatise entitled The Supreme Court on Patent Law.

During the oral argument this past week, Appellant, patent owner, argued for a coarse eligibility filter relative for § 101 in which little needs to be added to an abstract idea to render it patent eligible. Justice Breyer asked several questions of the appellant focusing on how to determine the difference between an unpatent-eligible abstract idea versus a patent-eligible implementation of that idea. The appellant did not appear to satisfy Justice Breyer’s concern.  Justice Breyer also noted that the Supreme Court has provided a “framework” for deciding § 101 eligibility, and he questioned why the Court should flesh out that framework any further. Interestingly, Justice Scalia engaged in what seemed to be cross-talk to the other Justices by suggesting several times that novelty should not be conflated with patent eligibility under § 101; an opinion popular with most of the bar.

Both the respondent as well as the Solicitor General argued for very narrow subject matter eligibility where computer-related claims must provide technological innovation in the computer or program itself or in some other technology associated with that computer/program. The U.S. Government’s position is a virtual 180 degree reversal from its argument in Mayo v. Prometheus in which it argued that virtually any step added to a law of nature should render the claim patent-eligible.

Overall it was clear that all the Justices completely understood the issues. It was truly a well prepped, hot bench. The question will be whether the Supreme Court continues to embrace a point-of-novelty approach (rolling novelty into a § 101 inquiry) as it did in Prometheus, or whether it will revert to its historical practice of finding abstract ideas and laws of nature patent eligible when they are tied to a practical application. Stakeholders hope for the latter, but fear for the former.

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