Supreme Court Upholds Invalidation Of Computerized Financial Method Patent

Court Finds the Claims Were Directed to Patent Ineligible Abstract Ideas

On June 19, 2014, in Alice Corp. v. CLS Bank International, 573 U.S. ___2014, a unanimous Supreme Court held that systems and methods of exchanging financial obligations, implemented in hardware or software, did not qualify for patent protection. The Court found that the claims at issue — directed to methods of mitigating "settlement risk" between financial institutions — were invalid as failing to claim patent eligible subject matter. The Court concluded that the claims only embodied "abstract" ideas constituting a category of patent ineligible subject matter, including algorithms, mathematical concepts, chemical elements, naturally occurring biological products, and methods that can be carried out in a person's head. Alice Corp. at 7 ("We conclude that ... These claims are drawn to the abstract idea of intermediated settlement."). Alice Corp. is the most recent Supreme Court decision