US Court of Appeals for the Federal Circuit finds Claims Directed to Commercial Arrangements Using Computers and Networks Unpatentable

On September 3, the US Court of Appeals for the Federal Circuit ruled that a Google patent directed to a method of guaranteeing an online transaction was abstract and patent ineligible under Section 101 (Buysafe, Inc. v. Google, Inc., Fed. Cir., No. 2013-1575, 9/3/14).

Applying the two-step analysis set forth by the US Supreme Court in Alice [Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)], the panel held that, though Google’s claims were narrow, such narrowing concerned “long-familiar” commercial transactions and did not make the idea at issue non-abstract.

The court found that the narrowing employed was an “attempt to limit the use” of the abstract guarantee idea “to a particular technological environment.” The panel emphasized that this form of narrowing had long been held insufficient to save a claim. See Alice, 134 S. Ct. at 2358; Mayo, 132 S. Ct. at 1294.

Further, the court found that the use of generic computer functions did not allow the claims to rise to the level of patent eligibility. The court stated that, “the claims’ invocation of computers adds no inventive concept. The computer functionality is generic –indeed, quite limited: a computer receives a request for a guarantee and transmits an offer of guarantee in return.”

Going forward, claims directed to commercial arrangements and contractual relationships using computers can be expected to fall squarely within the new Supreme Court authority in this delicate area.