Software-Related Patent Eligibility: Where Do We Stand after CLS Bank?

Vol. 6 No. 2


James A. Gromada is an associate at Sughrue Mion, PLLC in Washington, D.C. He specializes in patent prosecution, opinion practice, and counseling, with emphasis on electrical and mechanical technologies. He can be reached at The views expressed herein are solely those of the author.

On May 10, 2013, the United States Court of Appeals for the Federal Circuit issued a one-paragraph decision in CLS Bank v. Alice Corp. The following is a reproduction of the per curiam opinion in its entirety:

Upon consideration en banc, a majority of the court affirms the district court’s holding that the asserted method1 and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101. An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.2

Six separate opinions of much greater length accompany the en banc decision. However, in Chief Judge Rader’s concurring-in-part, dissenting-in-part opinion, an early footnote points out that “[n]o portion of any opinion issued today other than our Per Curiam Judgment garners a majority,” and therefore, “though much is published today discussing the proper approach to the patent eligibility inquiry, nothing said today beyond our judgment has the weight of precedent.”3

Overview of the Opinion

Lourie Concurrence

In the main concurring opinion, Judge Lourie writes for five of the 10 judges in support of the per curiam holding. The opinion first states “the basic steps in a patent-eligibility analysis” as follows:

We must first ask whether the claimed invention is a process, machine, manufacture, or composition of matter. . . . [If yes,] we must then determine whether any of the three judicial exceptions nonetheless bars such a claim—is the claim drawn to a patent-ineligible law of nature, natural phenomenon, or abstract idea? . . . Only claims that pass both inquiries satisfy § 101.4

The opinion then provides a useful history of relevant Supreme Court precedent, including discussion of Gottschalk v. Benson,5 Parker v. Flook,6 Diamond v. Diehr,7 Bilski v. Kappos,8 and Mayo v. Prometheus,9 leading up to an analysis of the claims at bar. In first analyzing a representative method claim, Judge Lourie asserts: “The concept of reducing settlement risk by facilitating a trade through third-party intermediation is an abstract idea because it is a ‘disembodied’ concept, a basic building block of human ingenuity, untethered from any real-world application.”10

His analysis proceeds to a question as to “whether the balance of the claim adds ‘significantly more,’” per Mayo, and he quite summarily concludes that “[n]one of [the claim’s] limitations adds anything of substance to the claim.”11 To the extent that the method claims could be construed as requiring a computer for implementation, the opinion states:

[T]he requirement for computer participation in these claims fails to supply an “inventive concept” that represents a nontrivial, nonconventional human contribution or materially narrows the claims relative to the abstract idea they embrace.

. . . .

In sum, there is nothing in the asserted method claims that represents “significantly more” than the underlying abstract idea for purposes of § 101.12

The analysis of the computer-readable media claims and system claims were found to be similarly defective.

Rader Dissent

In a partial dissent, and on behalf of four of the 10 judges, Chief Judge Rader begins with a philosophical discussion regarding the statute, using the word “expansive” and “breadth” several times to emphasize an overarching view that the court should generally be very reluctant to import restrictions on patent eligibility. Further, he asserts:

A court must consider the asserted claim as a whole when assessing eligibility . . . .

Any claim can be stripped down, simplified, generalized, or paraphrased to remove all of its concrete limitations, until at its core, something that could be characterized as an abstract idea is revealed. . . . A court cannot go hunting for abstractions by ignoring the concrete, palpable, tangible limitations of the invention the patentee actually claims.13

In addressing the notion that merely reciting a general purpose computer is not sufficient for patent eligibility, per Mayo, Judge Rader cites Bilski to support the following:

[T]he fact that a claim is limited by a tie to a computer is an important indication of patent eligibility. . . .

The key to this inquiry is whether the claims tie the otherwise abstract idea to a specific way of doing something with a computer, or a specific computer for doing something; if so, they likely will be patent eligible, unlike claims directed to nothing more than the idea of doing that thing on a computer.14

Later, with respect to the system claims at bar, Judge Rader opines: “Labeling this system claim an ‘abstract concept’ wrenches all meaning from those words, and turns a narrow exception into one which may swallow the expansive rule (and with it much of the investment and innovation in software).”15

However, with respect to the method claims, Judge Rader (writing for himself and Judge Moore) concludes that “the claim as a whole embraces using an escrow to avoid risk of one party’s inability to pay—an abstract concept. Viewed as a whole, the claim is indistinguishable from the claim in Bilski [which was held to be patent-ineligible].”16

Newman Dissent

Judge Newman, writing separately in a dissenting opinion, indicated that the method, system, and computer readable medium claims, standing or falling together, should be found patent-eligible, and she expressed some frustration:

The ascendance of section 101 as an independent source of litigation . . . is a new uncertainty for inventors. The court, now rehearing this case en banc, hoped to ameliorate this uncertainty by providing objective standards for section 101 patent-eligibility. Instead we have propounded at least three incompatible standards, devoid of consensus . . . . With today’s judicial deadlock, the only assurance is that any successful innovation is likely to be challenged in opportunistic litigation, whose result will depend on the random selection of the panel.17

Lack of Clarity Continues

In view of the discord and the lack of any uniform guidance provided by this opinion, questions regarding which computer-implemented and/or software-related patent claims are patent-eligible under 35 U.S.C. § 101 will remain unsettled for the time being. Applicants wishing to claim subject matter tending toward an abstract principle would be well-advised to seek several alternate approaches and scope to claim drafting in order to protect their inventions in view of this ongoing debate.

Due to the cursory nature of the precedential portion of the CLS Bank decision, litigators will recognize that the decision will rarely be useful in itself for purposes of citing binding case law authority. However, when viewed in conjunction with other recent Federal Circuit decisions that have applied Bilski, it is possible that some guidance may be gleaned.

In Research Corp. Technologies, Inc. v. Microsoft Corp., Judge Rader framed his analysis as follows:

[T]his court also will not presume to define “abstract” beyond the recognition that this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act.18

In this aspect, the court held that: “methods (statutory ‘processes’) for rendering a halftone image of a digital image by comparing, pixel by pixel, the digital image against a blue noise mask” are not “abstract,” but instead “present[] functional and palpable applications in the field of computer technology,” and thus are patent-eligible under 35 U.S.C. § 101.19 In particular, the court noted that “some claims in the [patents-in-suit] require a ‘high contrast film,’ ‘a film printer,’ ‘a memory,’ and ‘printer and display devices,’” and thus, although “the claimed methods incorporate algorithms and formulas that control the masks and halftoning, . . . [t]hese algorithms and formulas . . . do not bring this invention even close to abstractness that would override the statutory categories and context.”20 The court cited Diehr in support of an observation that “the patentees here ‘do not seek to patent a mathematical formula. Instead, they seek patent protection for a process of’ halftoning in computer applications.”21

In Dealertrack, Inc. v. Huber, the court affirmed a lower court decision holding a claim that recites a “ computer aided method of managing a credit application” to be patent-ineligible under § 101.22 The court provided the following analysis:

Dealertrack’s claimed process in its simplest form includes three steps: receiving data from one source (step A), selectively forwarding the data (step B, performed according to step D), and forwarding reply data to the first source (step C). . . .

Dealertrack’s primary argument is that the “computer-aided” limitation in the preamble sufficiently limits the claims to an application of the idea. . . .

Simply adding a “computer aided” limitation to a claim covering an abstract concept, without more, is insufficient to render the claim patent eligible.

The claims here do not require a specific application, nor are they tied to a particular machine. . . .

The restriction here is precisely the kind of limitation held to be insufficient to confer patent eligibility in Bilski II.23

In Bancorp Services, L.L.C. v. Sun Life Assurance Co., the patents-in-suit claimed “systems and methods for administering and tracking the value of life insurance policies in separate accounts.”24 Judge Lourie’s opinion held that “the claims cover no more than abstract ideas and therefore do not recite patent-eligible subject matter”:

Bancorp’s primary argument boils down to the contention that because its claims are limited to being performed on a computer, they cannot claim only an abstract idea. . . .

To salvage an otherwise patent-ineligible process, a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not. . . .

[F]or purposes of § 101 there is no material difference between the claims invalidated in Bilski and those at issue here.

. . . .

Research Corp. is different from the present case in two critical respects. First, the claimed process in Research Corp. plainly represented improvements to computer technologies in the marketplace. . . .

Second, the method in Research Corp., which required the manipulation of computer data structures (the pixels of a digital image and the mask) and the output of a modified computer data structure (the halftoned image), was dependent upon the computer components required to perform it. Here, in contrast, the computer merely permits one to manage a stable value protected life insurance policy more efficiently than one could mentally. Using a computer to accelerate an ineligible mental process does not make that process patent-eligible.25

In Ultramercial, Inc. v. Hulu, LLC, decided on June 21, 2013 (i.e., after the CLS Bank en banc decision), Judge Rader authored an opinion that reversed a district court decision holding a method for distributing copyrighted advertising material online unpatentable.26 In particular, claim 1 of the patent-in-suit27 recites a “method for distribution of products over the Internet via a facilitator.”28 The following text is illustrative of Judge Rader’s opinion:

A claim can embrace an abstract idea and be patentable. See [Mayo v.] Prometheus, 132 S. Ct. [1289,] 1294 . . . . [A] claim is not patent eligible only if, instead of claiming an application of an abstract idea, the claim is instead to the abstract idea itself. The inquiry here is to determine on which side of the line the claim falls: does the claim cover only an abstract idea, or instead does the claim cover an application of an abstract idea?

. . . .

Instead, the relevant inquiry is whether a claim, as a whole, includes meaningful limitations restricting it to an application, rather than merely an abstract idea. See Prometheus, 132 S. Ct. at 1297. . . .

The [patent-in-suit] seeks to remedy problems with prior art banner advertising over the Internet, such as declining click-through rates, by introducing a method of product distribution that forces consumers to view and possibly even interact with advertisements before permitting access to the desired media product. . . .

Specifically, the [patent-in-suit] claims a particular internet and computer-based method for monetizing copyrighted products, consisting of the following steps. . . . This court does not need the record of a formal claim construction to see that many of these steps require intricate and complex computer programming.

Even at this general level, it wrenches meaning from the word to label the claimed invention “abstract.” . . .

Further, and even without formal claim construction, it is clear that several steps plainly require that the method be performed through computers, on the internet, and in a cyber-market environment. . . .

Viewing the subject matter as a whole, the invention involves an extensive computer interface.

. . . .

Finally, the [patent-in-suit] does not claim a mathematical algorithm, a series of purely mental steps, or any similarly abstract concept. . . .

In sum, as a practical application of the general concept of advertising as currency and an improvement to prior art technology, the claimed invention is not “so manifestly abstract as to override the statutory language of section 101.” Research Corp., 627 F.3d at 869.29

Notably, Judge Lourie wrote a concurring opinion, including the following:

The abstract idea at the heart of the [patent-in-suit] . . . is “us[ing] advertising as an exchange or currency.” The . . . claims, however, require more than just that abstract idea as part of the claimed method.

The additional claim limitations reciting how that idea is implemented “narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.” CLS Bank, 2013 WL 1920941, at *10. While a computer or complex computer program, as discussed by the majority opinion, may be necessary to perform the method, it is not what the claim specifically requires and thus should not be the focus of the analysis. . . . [U]nlike the method claims in CLS Bank, in my view, the added limitations in these claims represent significantly more than the underlying abstract idea of using advertising as an exchange or currency and, as a consequence, do not preempt the use of that idea in all fields. See CLS Bank, 2013 WL 1920941, at *15.30

On September 5, 2013, in Accenture Global Services v. Guidewire Software, a divided three-judge panel of the Federal Circuit held that system claims 1–7 of U.S. Patent No. 7,013,284 recite patent-ineligible subject matter under 35 U.S.C. § 101. Interestingly, Judge Lourie wrote the majority opinion, on behalf of himself and Judge Reyna, and Chief Judge Rader dissented.

The ’284 patent includes 22 claims, and claims 1–7 are directed to “a system for generating tasks to be performed in an insurance organization,”31 and claims 8–22 are “similar method claims.” The lower court (District of Delaware) had previously held that all 22 claims are patent-ineligible in a 2011 decision that predates CLS Bank, and Accenture appealed only as to claims 1–7.

Judge Lourie relies on the “plurality opinion” of CLS Bank, of which he is the author, for the proposition that “a majority of the court held that system claims that closely track method claims and are grounded by the same meaningful limitations will generally rise and fall together.” As a result:

Accenture argues that system claim 1 remains patent-eligible even after our decision in CLS Bank. It contends that the claim is patent-eligible because the ’284 patent implements the general idea of generating tasks for insurance claim processing, but narrows it through its recitation of a combination of computer components including an insurance transaction database, a task library database, a client component, and a server component, which includes an event processor, a task engine, and a task assistant. Accenture further argues that the complexity and detail of the specification demonstrate that the patent is an advance in computer software and not simply a claim to an abstract idea.

Accenture argues that our decision in Ultramercial compels reversal of the district court’s invalidation of the system claims. However, . . . unlike the patent at issue in Ultramercial, Accenture’s claims do not contain “significantly more than the underlying abstract concept.” The claims in Ultramercial contained additional limitations from the abstract idea of advertising as currency, such as limiting the transaction to an Internet website, offering free access conditioned on viewing a sponsor message, and only applying to a media product. See Ultramercial, 2013 WL 3111303, at *15.

The ’284 patent’s system claim 1, however, is similar to the patent-ineligible system claim from CLS Bank. That claim contained limitations such as a data storage unit and a general purpose computer that received transactions, adjusted variables in the data storage unit, and generated instructions. CLS Bank, 717 F.3d at 1289. . . . Similarly, in Bancorp, we found a system claim comprising digital storage, a policy generator, a debitor, and various calculators patent-ineligible because the limitations of that claim were directed to no more than the abstract idea of managing a stable value protected life insurance policy . . . . Comparing these cases, we find that the system claim of the ’284 patent is more akin to the patent-ineligible claims of CLS Bank and Bancorp. Unlike the claims at issue in Ultramercial, the system claims in the ’284 patent contain only generalized steps of generating a task in response to events.

However, Chief Judge Rader diametrically disagrees with this rationale, and provides compelling reasons for his view. The following is taken from Chief Judge Rader’s dissent:

As an initial matter, the court relies significantly on the framework proposed by the plurality opinion in CLS Bank . . . . However, no part of CLS Bank, including the plurality opinion, carries the weight of precedent. The court’s focus should be on Supreme Court precedent and precedent from this court.

. . .

On the merits, I would hold that the claimed systems present patent-eligible subject matter. The claims require a specific combination of computer components, including an insurance transaction database, a task library database, a client component, and a server component that includes an event processor, task engine, and task assistant. Transaction information is stored in an electronic “claim folder” organized into a plurality of different levels. The event processor is triggered upon occurrence of certain events, which in turn, triggers the task engine and the task assistant to perform certain functions. The claims also require the server component to be in communication with the client component, the insurance transaction database, and the task library database.

The court strips away these limitations and concludes that “the abstract idea at the heart of system claim 1 is generating tasks based on rules to be completed upon the occurrence of an event.” Majority Op. at 15. “[A]ll inventions at some level embody . . . [an] abstract idea,” and dissecting from a claim all of its concrete limitations is one step closer towards “eviscerat[ing] patent law.” Mayo Collaborative Services v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012). The claims offer “significantly more” than the purported abstract idea, id. at 1298, and meaningfully limit the claims’ scope.

Indeed, someone can “generate tasks based on rules to be completed upon the occurrence of an event” in a number of ways without infringing the claims. . . . Moreover, because the claims require specific computer components, a human performing the claimed steps through a combination of physical or mental steps likewise does not infringe. In sum, this system does not preempt anything beyond the specific claims, let alone a broad and undefined concept.

Applying Section 101 Post-CLS Bank

Interestingly, Judge Rader and Judge Lourie are the authors of the two lengthiest opinions that accompany the CLS Bank en banc decision, and together they wrote for nine of the 10 judges that sat en banc. Therefore, in view of Judge Lourie’s reliance upon his CLS Bank concurrence and in view of the agreement at least as to the correct result of the § 101 analysis in Ultramercial, this author believes that Ultramercial may effectively serve as the best guidepost to future cases regarding abstractness with respect to § 101 patent eligibility.

In this aspect, the two judges seem to agree that if a patent claim recites steps that “represent significantly more than the underlying abstract idea” and if the patent “does not claim a mathematical algorithm, a series of purely mental steps, or any similarly abstract concept,” it is likely that the court will find such a patent claim to be statutory under § 101. By contrast, if the patent claim is deemed to cover merely the abstract idea itself in conjunction with the use of a computer for purposes of efficiency alone, or if the claim is deemed to recite “a mathematical algorithm” or “a series of purely mental steps,” it is likely that the court will deem such a claim patent-ineligible under § 101.

However, the Accenture case seems to indicate that the fracture in the Federal Circuit with respect to the issue of whether a computer-implemented invention is patent-eligible under 35 U.S.C. § 101 remains significant, especially with respect to Chief Judge Rader and Judge Lourie. This case illustrates the points made in the petition for a writ of certiorari, which was filed in the Supreme Court of the United States by Alice Corporation on September 4, 2013, i.e., one day before the issuance of the Accenture decision, and thus will only increase the likelihood that the Supreme Court will accept the CLS Bank case in order to provide guidance with respect to this important issue.

In CLS Bank, Judge Lourie and Chief Judge Rader agreed that the method claims are patent-ineligible as being too abstract, whereas the two judges disagreed as to whether the system claims should be deemed patent-ineligible. In particular, Judge Lourie views the system claims as “recit[ing] a handful of computer components in generic, functional terms that would encompass any device capable of performing the same ubiquitous calculation, storage, and connectivity functions required by the method claims,” and thus, Judge Lourie treats the system claims as being essentially equivalent to the method claims for purposes of determining patent eligibility. By contrast, Chief Judge Rader relies on the Supreme Court decision in Diamond v. Diehr to find the system claims patent-eligible despite the patent-ineligibility of the corresponding method claims, opining that “[t]he claim begins with the machine acquiring data and ends with the machine exchanging financial instructions with other machines. The ‘abstract idea’ present here is not disembodied at all, but is instead integrated into a system utilizing machines.”

In Ultramercial, both judges found that the method claim at issue was patent-eligible. There was no system claim at issue, but one can surmise that a corresponding system claim would also have been found patent-eligible. In Accenture, the only claims on appeal were system claims; the holding of the lower court that the corresponding method claims are patent-ineligible was not appealed. Thus, similarly as in CLS Bank, Judge Lourie found that the abstractness of the method claims (deemed to be conceded by virtue of the non-appeal of these claims) was not cured by the recitation of computer implementation, because “the system claim and method claim contain only ‘minor differences in terminology [but] require performance of the same basic process,’ (citing Mayo, 132 S. Ct. at 1291), they should rise or fall together.” By contrast, similarly as in CLS Bank, Chief Judge Rader found that “[t]he claims require a specific combination of computer components” and a specific configuration thereof, and that such a combination is sufficient to render the claim patent-eligible.

Taken together, these decisions indicate that the judges agree that if a patent claim recites steps that “represent significantly more than the underlying abstract idea” and if the patent “does not claim a mathematical algorithm, a series of purely mental steps, or any similarly abstract concept,” it is likely that the court will find such a patent claim to be statutory under § 101. By contrast, if the patent claim is deemed to cover merely the abstract idea itself in conjunction with the use of a computer for purposes of efficiency alone, or if the claim is deemed to recite “a mathematical algorithm” or “a series of purely mental steps,” it is likely that the court will deem such a claim patent-ineligible under § 101. However, in a circumstance in which Judge Lourie and Chief Judge Rader agree that a method claim is directed to an abstract idea and is therefore patent-ineligible, it is highly probable that the five judges that joined Judge Lourie’s opinion in CLS Bank will find a corresponding system claim also patent-ineligible for the same reasons, whereas the four judges that joined Chief Judge Rader’s opinion in CLS Bank are far more likely to find that a corresponding system claim may be patent-eligible, if the claim sufficiently recites a machine-based computer configuration for implementing the otherwise abstract idea.

Drawing the line between what is abstract and what is sufficiently tangible for patent eligibility necessarily starts with the claim language. It could be argued, based on the decisions of Accenture (system for generating tasks to be performed in an insurance organization) and CLS Bank (method of exchanging obligations between parties), that claims directed to business-related inventions appear to have a higher hurdle to clear than claims in traditional technology fields. However, that the Federal Circuit found a method of distribution of products over the Internet to be patent-eligible in the Ultramercial case indicates that electronic business, or e-commerce, does squarely fall into the domain of patent-eligible subject matter. One key towards protecting business-related inventions would be to claim clear steps in the process for which a patent is sought. In this regard, consider the abstractions of “task generation” and “rules” and “trigger events” claimed in Accenture. These terms, by their very nature, are abstract. They lead to the questions of “what type of tasks” are generated? What are the “rules”? What are the “trigger events”? Compare this with recitations of Ultramercial, which describe accessing an activity log to verify “that the total number of times which the sponsor message has been previously presented is less than a number of transaction cycles.” Had the Ultramercial claim alternately claimed accessing the activity log to “verify compliance with a rule,” then one might expect that the result of Ultramercial would be no different than the result of CLS Bank or Accenture. In particular, it would be more likely that such a recitation would have rendered the claim too abstract to qualify for patent protection.

Guidelines for Drafting a Methods Claim

In view of the several opinions that accompany the CLS Bank en banc decision and the Ultramercial and Accenture decisions, with respect to computer-implemented methods, the author suggests the following guidance for claim drafters:

(1) With respect to an abstract idea contemplated by a claim, identify and recite at least one tangible and/or concrete aspect that attaches to the abstract idea;32 and

(2) Identify, and recite in the body of the claim, at least one element (i.e., method step) which requires an action that would reasonably be understood as not being performable as a mere series of mental steps and not being expressible as a mathematical algorithm.

(3) With respect to a method claim and a corresponding system claim, recognize that many Federal Circuit judges will treat these claims as standing or falling together, and therefore, insofar as the method claim could be deemed to be patent-ineligible as being directed to an abstract idea, the system claim is also at risk, and the determination may depend heavily upon which specific Federal Circuit judges hear the case. Therefore, claim drafters should take care to ensure that the method claim is patent-eligible based on the first two criteria above.

A claim that satisfies all three of these criteria would likely satisfy both Judge Lourie and Judge Rader, based on the views expressed in CLS Bank, Ultramercial, and Accenture, and therefore preempt most challenges with respect to potential patent-ineligibility under 35 U.S.C. § 101. n


Petitions for Writ of Certiorari

On August 23, 2013, WildTangent, Inc. filed a petition for a writ of certiorari in the Supreme Court of the United States, thereby appealing the decision of the Federal Circuit in Ultramercial, LLC v. Hulu, LLC. Less than two weeks later, on September 4, 2013, Alice Corporation filed a petition for a writ of certiorari in the Supreme Court of the United States, thereby appealing the en banc decision of the Federal Circuit in CLS Bank v. Alice Corporation.

In the latter petition, counsel for Alice refers to the intention of the Federal Circuit to address two questions:

  1. What test should the court adopt to determine whether a computer-implemented invention is a patent-ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise ineligible abstract idea?
  2. In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium?

The petition indicates that it has been widely “anticipated that the en banc court would use this case to set forth clearer guidance” with respect to these issues.

The petition then proffers that:

far from providing clearer guidance, the Federal Circuit issued six separate opinions spanning more than 125 pages, none of which reflected an approach endorsed by a majority. . . . As a result, the legal standards that govern whether computer-implemented inventions are eligible for patent protection under section 101 remain entirely unclear and utterly panel dependent. . . . The Federal Circuit has left no doubt that it is irreconcilably fractured. The uncertainty that now plagues . . . the patent system will cause severe harm and waste.

In the petition relating to Ultramercial, counsel for WildTangent asserts that “[t]he decision in this case is particularly problematic because it seeks to fill the void left in the wake of the Federal Circuit’s failed en banc hearing in CLS Bank v. Alice Corp., which produced multiple conflicting opinions on the patent eligibility of computer-implemented claims but no majority rationale.” In this petition, counsel submits that the “Question Presented” is as follows: “When is a patent’s reference to a computer, or computer-implemented service like the Internet, sufficient to make an unpatentable abstract concept patent eligible under 35 U.S.C. § 101?”

Inventors and patent practitioners will be watching closely to see whether and when the Supreme Court accepts these cases, which, if accepted, would likely be deemed to be companion cases.


1. One of the asserted method claims was claim 33 of U.S. Patent No. 5,970,479:

33. A method of exchanging obligations as between parties, each party holding a credit record and a debit record with an exchange institution, the credit records and debit records for exchange of predetermined obligations, the method comprising the steps of:

(a) creating a shadow credit record and a shadow debit record for each stakeholder party to be held independently by a supervisory institution from the exchange institutions;

(b) obtaining from each exchange institution a start-of-day balance for each shadow credit record and shadow debit record;

(c) for every transaction resulting in an exchange obligation, the supervisory institution adjusting each respective party’s shadow credit record or shadow debit record, allowing only these transactions that do not result in the value of the shadow debit record being less than the value of the shadow credit record at any time, each said adjustment taking place in chronological order; and

(d) at the end-of-day, the supervisory institution instructing one of the exchange institutions to exchange credits or debits to the credit record and debit record of the respective parties in accordance with the adjustments of the said permitted transactions, the credits and debits being irrevocable, time invariant obligations placed on the exchange institutions.

2. CLS Bank Int’l v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1273 (Fed. Cir. 2013) (per curiam).

3. Id. at 1292 n.1 (Rader, C.J., concurring in part and dissenting in part).

4. Id. at 1277 (Lourie, J., concurring).

5. 409 U.S. 63 (1972).

6. 437 U.S. 584 (1978).

7. 450 U.S. 175 (1981).

8. 130 S. Ct. 3218 (2010).

9. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012).

10. CLS Bank Int’l v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1286 (per curiam) (Lourie, J., concurring) (citation omitted).

11. Id.

12. Id. at 1286–87.

13. Id. at 1298 (Rader, C.J., concurring in part and dissenting in part).

14. Id. at 1302 (citing Bilski v. Kappos, 130 S. Ct. 3218, 3227 (2010)).

15. Id. at 1308.

16. Id. at 1312 (citing Bilski, 130 S. Ct. at 3231).

17. Id. at 1321 (Newman, J., concurring in part and dissenting in part).

18. 627 F.3d 859, 868 (Fed. Cir. 2010).

19. Id.

20. Id. at 869.

21. Id. (quoting Diamond v. Diehr, 450 U.S. 175, 187 (1981)).

22. 674 F.3d 1315, 1331 (Fed. Cir. 2012).

23. Id. at 1333–34 (citation omitted).

24. 687 F.3d 1266, 1269 (Fed. Cir. 2012).

25. Id. at 1277–79.

26. No. 2010-1544, 2013 WL 3111303 (Fed. Cir. June 21, 2013).

27. Claim 1 of U.S. Patent No. 7,346,545 recites:

A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:

a first step of receiving, from a content provider, media products that are covered by intellectual property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;

a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;

a third step of providing the media product for sale at an Internet website;

a fourth step of restricting general public access to said media product;

a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;

a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;

a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;

an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;

a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;

a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and

an eleventh step of receiving payment from the sponsor of the sponsor message displayed.

28. Ultramercial, 2013 WL 3111303, at *1.

29. Id. at *7–8, *14–15, *17 (citations omitted).

30. Id. at *18 (Lourie, J., concurring) (citation omitted).

31. Claim 1 of U.S. Patent No. 7,013,284 recites:

1. A system for generating tasks to be performed in an insurance organization, the system comprising:

an insurance transaction database for storing information related to an insurance transaction, the insurance transaction database comprising a claim folder containing the information related to the insurance transaction decomposed into a plurality of levels from the group comprising a policy level, a claim level, a participant level and a line level, wherein the plurality of levels reflects a policy, the information related to the insurance transaction, claimants and an insured person in a structured format;

a task library database for storing rules for determining tasks to be completed upon an occurrence of an event;

a client component in communication with the insurance transaction database configured for providing information relating to the insurance transaction, said client component enabling access by an assigned claim handler to a plurality of tasks that achieve an insurance related goal upon completion; and

a server component in communication with the client component, the transaction database and the task library database, the server component including an event processor, a task engine and a task assistant,

wherein the event processor is triggered by application events associated with a change in the information, and send an event trigger to the task engine; wherein in response to the event trigger, the task engine identifies rules in the task library database associated with the event and applies the information to the identified rules to determine the tasks to be completed, and populates on a task assistant the determined tasks to be completed, wherein the task assistant transmits the determined tasks to the client component.

32. See, e.g., Ultramercial, 2013 WL 3111303, at *17 (majority opinion) (stating that claim 1 of the patent-in-suit recites “a particular method for collecting revenue from the distribution of media products over the Internet . . . [which] require[s], among other things, controlled interaction with a consumer over an Internet website, something far removed from purely mental steps”).


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