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Supreme Court sends computer-implemented business method claims down the rabbit hole

The US Supreme Court has maintained its solidarity with yet another 9-0 patent decision in Alice Corporation v CLS Bank, holding that Alice’s patent claims directed towards mitigation of settlement risk were patent-ineligible subject matter. The court criticised the claims, finding that they merely required generic computer implementation of an abstract idea.

The representative claim was directed towards a method of mitigating risk and required four discrete steps: (1) creation of shadow credit and debit records; (2) obtaining a balance for the shadow records; (3) adjustment of shadow records when transactions requiring an exchange obligation occurred; and (4) instructing exchanges of credits or debits based on the adjustments. Additional claims were directed toward computer systems to carry out the described method and a computer-readable medium containing program code to perform the described method. All claims were deemed patent-ineligible subject matter.

The court made clear that ‘an invention is not rendered ineligible for patent simply because it involves an abstract concept’. Rather, it is the failure to transform an abstract idea that renders an invention patent ineligible. The court likened abstract ideas to building blocks; claims directed towards the building blocks are not patentable, but inventions that integrate the building blocks into something more are patent eligible…

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