Claims Directed To Statutory Subject Matter Under 35 U.S.C. § 101 Unless Unpatentability Is 'Manifestly Evident'

In CLS Bank International v. Alice Corp., No. 11-1301 (Fed. Cir. July 9, 2012), the Federal Circuit reversed the district court's grant of SJ in favor of CLS Bank International and CLS Services Ltd. (collectively "CLS Bank"), finding that the system, method, and media claims of the patents-in-suit are not directed to mere abstract ideas, but rather to practical applications of invention that fall within the categories of patent-eligible subject matter defined by 35 U.S.C. § 101.

Alice Corporation Pty. Ltd. ("Alice") is the owner of the patents-in-suit, which include U.S. Patent Nos. 5,970,479 ("the '479 patent"); 6,912,510 ("the '510 patent"); 7,149,720 ("the '720 patent"); and 7,725,375 ("the '375 patent"). The four patents-in-suit include system, method, and media claims directed to a computerized trading platform that enables a trusted third party to settle obligations between a first and second party in a manner that eliminates a "settlement risk" associated with a transaction.

CLS Bank filed suit against Alice seeking DJ of noninfringement against the '479, '510, and '720 patents, and Alice filed a counterclaim alleging that CLS Bank infringed those patents. CLS Bank later moved for SJ, contending that the asserted claims of the '479, '510, and '720 patents were invalid under 35 U.S.C. § 101. Alice opposed and cross-moved for SJ. Following the Supreme Court's grant of certiorari in In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc), cert. granted sub. nom. Bilski v. Doll, 129 S. Ct. 2735 (June 1, 2009), the district court denied the parties' cross-motions for SJ as to subject matter eligibility without prejudice to refiling following the Supreme Court's decision on certiorari.

Upon issuance of the '375 patent, Alice filed amended counterclaims additionally asserting that CLS Bank infringed the claims of the '375 patent. After the Supreme Court's decision in Bilski v. Kappos, 130 S. Ct. 3218 (2010), the parties renewed their cross-motions for SJ, and CLS Bank additionally asserted the invalidity of the '375 patent under 35 U.S.C. § 101. The district court granted CLS Bank's motion for SJ and denied Alice's cross-motion, finding that the asserted claims of the patents-in-suit were invalid for failing to claim patent-eligible subject matter under 35 U.S.C. § 101. Alice appealed.

Noting the different purposes of 35 U.S.C. §§ 101, 102, 103, and 112, the Court stated that §§ 102, 103, and 112, and not § 101, perform the substantive work...