Alice Corp. v. CLS Bank, No. 13-298

On June 19, 2014, the Supreme Court issued its long awaited decision in Alice Corp. v. CLS Bank. In a unanimous decision, the Court upheld the Federal Circuit’s decision which found the claims of Alice Corporation’s patents, drawn to a computer implemented method of mitigating settlement risk, to be invalid because they were directed to patent ineligible subject matter. The Court adhered closely to long-standing precedent which holds that “abstract ideas,” such as the mathematical algorithms claimed in Alice Corporation’s patents, are not patentable. The Court made clear that implementing a known mathematical algorithm on a computer does not transform an otherwise abstract idea into patentable subject matter.

In view of Court’s decision in Alice Corp. v. CLS Bank, the question arises as to whether computer software is now foreclosed from patent eligibility. The answer to this question would appear to be “no.” The Court has arguably left open the door for future software patents by noting that software claims that improve the functioning of a computer or improve other technology or a technical field, may be eligible for patent protection.