After an en banc hearing at the United States Court of Appeals for the Federal Circuit (CAFC), questions remain about the patent eligibility of software under US Patent and Trademark Office rules (specifically, § 101). The CAFC upheld the district court decision in CLS Bank Int’l v. Alice Corp. Pty. Ltd. (CLS Bank) that certain software-based systems, submethods, and computer-readable media for mitigating risk in financial transactions through third-party intermediation are not eligible for patent protection. However, the court was sharply divided in its reasoning, issuing six separate opinions. (Read the CAFC's full decision here.)
Although quite varied, and not precedential, there is guidance in the judges’ six separate opinions. Inventors are well-served to prepare and prosecute their patent applications for software-based innovations with a view to addressing as many of the judges’ concerns over patent eligibility as possible to maximize the probability of issuance of valid patents.
Opinions expressed to which we recommend you pay particular attention include (more detail is provided in the firm's advisory on the CLS Bank case):
- Half of the judges hold the view that patent claims directed to computer systems configured with software are eligible for patent protection
- Three of the judges viewed the method and computer-readable media claims to be patent eligible as being sufficiently tied to a computer
- The remaining judges expressed their view that the system, method, and computer-readable media claims were not patent eligible because they were direction to “abstract ideas”