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Software patents in light of CLS Bank v. Alice Corporation

Posted by: In: Uncategorized 04 Apr 2013 Comments: 0 Tags:

On February 8, 2013, the Court of Appeals for the Federal Circuit sat en banc to rehear arguments in CLS Bank v. Alice Corporation, a case being closely watched by owners of software patents worldwide. A three-judge panel of the Federal Circuit had previously found that Alice’s patents, essentially claiming a trading platform that minimizes risk through an intermediary, were in fact patent eligible and valid.

The Federal Circuit granted an en banc rehearing to address two questions. First, what test the Court should use to determine whether a computer-implemented invention is an “abstract idea” and when the presence of a computer makes a patent-ineligible abstract idea patent eligible. Second, if it matters whether the invention is claimed as a method, system or storage medium.

I recently listened to the oral arguments before the en banc panel and one exchange really stood out to me. During the argument, CLS Bank stated that Alice’s patents represented no advancement in computer technology. Obviously, Alice disagreed and in its rebuttal stated that finding new ways to use a computer to solve a real world problem is an advancement in computer technology. Alice argued that since its patent is solving a real world problem, it is an advancement and, therefore, is patent eligible.

While the Federal Circuit will judge what is and is not an advancement, I found this exchange interesting because it harkens back to the simple goal of the patent system laid out by the Founders in the Constitution: “To promote the Progress of Science and the useful Arts.” While patent law and the related judicial decisions can get complex and dense at times, it is useful to remember this goal laid out in Article I, Section 8, Clause 8. In Federalist Number 43, James Madison wrote with regard to this provision of the Constitution:

“The utility of the power will scarcely be questioned. The copyright of authors has been solemnly adjudged in Great Britain to be a right of common law. The right to useful inventions seems with equal reason to belong to the inventors. The public good fully coincides in both cases with the claims of individuals.”

The Founders thought that rewarding advancement was so important to the “public good” of the country that they explicitly included a provision for it in the Constitution; even though it was an issue that the people would likely not question since it was a matter of common law. Perhaps when determining the test for patent eligibility, it would be helpful to take a step back and remember what the goal of the patent system really is. I was happy to hear that there was a hint of this in the recent oral arguments.

– Suzy Fitzgerald

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