TROUBLE FOR SOFTWARE AND BUSINESS METHOD PATENTS – FEDERAL CIRCUIT INVALIDATES PATENT CLAIMS USING ALICE FRAMEWORK

Contributed by Kristin A. Biedinger

BUYSAFE, INC. V. GOOGLE, INC.
To secure a patent in the United States, an invention must meet a number of requirements. In addition to being novel, useful, and non-obvious (35 U.S.C. §102 and §103), an invention must also fall into one of the statutory classes of patentable subject matter: machine, process, manufacture, or composition of matter (35 U.S.C. §101). The invention must also not fall under one of the exceptions to patentable subject matter: abstract idea, natural phenomenon, or law of nature.

Earlier this summer, the Supreme Court addressed the issue of patentable subject matter in the highly anticipated Alice Corporation PTY, LTD v. CLS Bank International et al decision. The relevant patent claims in Alice related to the exchange of financial obligations using a computer. In assessing the claims under §101, the Court applied a two step framework. First, it must be determined whether or not the claims are related to patent-ineligible subject matter (for example, an abstract idea). Second, the claims must be examined both individually and as an ordered combination to determine whether or not they contain an “inventive concept sufficient to transform” the patent-ineligible subject matter into a patent-eligible application.

In Alice, the Court concluded that the addition of a computer, performing generic functions, to an otherwise abstract idea (the exchange of financial obligations) was not enough to make the subject matter patent-eligible.

Recently, the Court of Appeals for the Federal Circuit applied the Alice framework in deciding buySafe, Inc. v. Google, Inc. Here, the relevant claims related to creating commercial arrangements using computers and networks. The Court found the Alice framework easily applicable in this case: the claims are directed to an abstract idea and the implementation of a computer to perform generic functions “adds no inventive concept.” The Court affirmed the District Court’s holding that the claims are invalid.

This recent decision is a good indication of how similar business method and software patent claims may be invalidated under §101. Ensuring patent claims past the Alice test will be critical in drafting any new applications for software or business methods. Adding a generic computer to an otherwise patent-ineligible method will not be enough.

If you are considering filing a software or business method patent application, or if you would like more information on how to best protect your company’s intellectual property assets, contact Kristin Biedinger at (412) 594-3916 or kbiedinger@tuckerlaw.com.