CLS Bank Int'l v. Alice Corp. (Fed. Cir. 2013) (en banc) -- Opinions by Judge Moore, Judge Newman, and Judges Linn and O'Malley

By Michael Borella --

A previous post presented the background of this case, as well as Judge Lourie's plurality concurrence, and a second post addressed Chief Judge Rader's concurrence-in-part and dissent-in-part.  As noted in those posts, Alice's claimed inventions involved the reduction of settlement risk using a third-party intermediary.  This post continues the story of Alice by discussing the dissenting-in-part opinion by Circuit Judge Moore, the concurring-in-part and dissenting-in-part opinion by Circuit Judge Newman, and the dissenting opinion by Circuit Judges Linn and O'Malley.

Judge Moore's dissent-in-part

Judge Moore begins her opinion, which was joined by Judges Rader, Linn, and O'Malley, with a warning:  "if all of these claims, including the system claims, are not patent-eligible, this case is the death of  hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications patents."  She noted that 320,799 patents were granted over a 13 year period in the USPTO's "Electrical Computers, Digital Processing Systems, Information Security, Error/Fault Handling" technology area, and that all of these patents were potentially at risk under Judge Lourie's opinion.

Like Judge Rader, Judge Moore stated that claims must be considered as a whole, and under that standard, Alice's system claims would be patent-eligible.  She noted that Prometheus explicitly indicated that interpreting the judicial exceptions to subject matter patentability too broadly would "eviscerate patent law" because at some level all inventions are based on abstract ideas, laws of nature, and/or natural phenomena.

Judge Moore also argued against the conflation of § 101, § 102, and § 103.  She noted that Judge Lourie's "inventive concept" analysis introduced a time-dependency into the § 101 inquiry that was more appropriate for the inquiries of the other sections.  To illustrate this point, she provided examples:

Even though the concept of addition is an abstract idea, the first calculator that could perform addition was a patent-eligible machine under § 101.  If someone subsequently discovered that, by rewiring the calculator, it could perform addition and subtraction (both abstract mathematical concepts), the improved calculator would similarly be patent-eligible.  The act of modifying the circuitry of a known device such that it is configured to apply an abstract idea does not transform it into an abstract idea.

Accordingly, largely based on the same general reasoning as Judge Rader, Judge Moore would have found Alice's system claims patent-eligible.

Judge Newman's concurrence-in-part and dissent-in-part

Judge Newman begins by noting that this case has provided three incompatible standards for § 101 analysis, opening the door for "opportunistic litigation, whose result will depend on the random selection of the panel."  She plainly stated that the Federal Circuit has failed to clarify the interpretation of § 101.

Judge Newman's position, like that of four of her colleagues, is that the § 101, § 102, and § 103 inquiries are separate.  She writes "it is not necessary, or appropriate, to decide whether subject matter is patentable in order to decide whether it is eligible to be considered for patentability."  She propounded a simplification of the § 101 inquiry by suggesting that "when the subject matter is within the statutory classes in section 101, eligibility is established."  Invoking the oft-quoted phrase that patent law embraces "anything under the sun that is made by man," she would push off all considerations of claim breadth to the other sections of the statute.

Ultimately, Judge Newman positioned her separate opinion as call for the Federal Circuit to affirm three basic principles of patentable subject matter.

1)  "The court should hold that section 101 is an inclusive statement of patent-eligible subject matter."  Judge Newman advocated eliminating claims that are abstract or that pre-empt abstract ideas or the other judicial exceptions using "laws of novelty, utility, prior art, obviousness, description, enablement, and specificity."

2)  "The court should hold that the form of the claim does not determine section 101 eligibility."  Whether the invention is claimed as a method, CRM, or system, and whether it is implemented with hardware or software, would not be relevant to the § 101 inquiry for Judge Newman.  Like Judge Lourie, she would attempt to decrease the impact of the so-called "clever draftsman."

3)  "The court should confirm that experimental use of patented information is not barred."  Perhaps most important of the three, Judge Newman believes that the popular media has misconstrued the debate on patentable subject matter to mean that a patented invention cannot further be studied.  In particular, she would have the Court hold that experiments that improve or build upon patented subject matter, compare it with alternatives, seek to understand its mechanisms, and to find new applications should be considered non-infringing activities.

Judge Linn's and Judge O'Malley's dissent

In stark contrast to their colleagues, Judges Linn and O'Malley would reverse the District Court ruling and find all claims patent-eligible for procedural reasons.

Since the summary judgment motions were filed prior to claim construction, the District Court gave the claims, for purposes of considering these motions, an interpretation defined by Alice.  Thus, Judges Linn and O'Malley afforded that the District Court was "required to read into the claims whatever limitations Alice asserted a skilled artisan would assume they possessed."  And, as noted above, the parties stipulated at trial that all claims required a computer and a memory to be performed.

Consequently, Judges Linn and O'Malley faulted Judges Rader and Moore of improperly construing the method claims more broadly than the system claims, and also reproached Judge Lourie for importing the breadth of the method claims into the system and CRM claims.  Judges Linn and O'Malley would have all claims rise or fall together.

With respect to the patent-eligibility of the system claims, the judges reiterated the position of Judge Rader.  However, they would also apply the same analysis to the method and CRM claims, and find those claims meeting the § 101 requirements as well.

Judges Linn and O'Malley concluded with a discussion of software patents at large.  Rather than use § 101 to mitigate a supposed "proliferation and aggressive enforcement of low quality software patents" concerning the various amici curiae, they would push this issue back to Congress for legislative action.  They suggested that Congress could limit the term of software patents, or limit their scope by requiring functional claiming.

CLS Bank Int'l v. Alice Corp. (Fed. Cir. 2013) (en banc)
Opinion for the court per curiam; concurring opinion by Circuit Judge Lourie, joined by Circuit Judges Dyk, Prost, Reyna, and Wallach; concurring-in-part and dissenting-in-part opinion by Chief Judge Rader, joined by Circuit Judge Moore, and by Circuit Judges Linn and O'Malley as to all but part VI of that opinion; dissenting-in-part opinion by Circuit Judge Moore, joined by Chief Judge Rader and Circuit Judges Linn and O'Malley; concurring-in-part and dissenting-in-part opinion by Circuit Judge Newman; dissenting opinion by Circuit Judges Linn and O'Malley; additional reflections by Chief Judge Rader.