Alice Corporation Pty. Ltd. v. Cls Bank International

134 S.Ct. 2347 (2014)

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Nature of the Case

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Facts

D is the assignee of patents that disclose schemes to manage certain forms of financial risk. The “invention relates to methods and apparatus, including electrical computers and data processing systems applied to financial matters and risk management.” The invention relates to a computerized scheme for mitigating “settlement risk.” All of the claims are implemented using a computer. CLS (P) sought a declaratory judgment that the claims at issue are invalid, unenforceable, or not infringed. D counterclaimed, alleging infringement. The District Court held that the claims are patent ineligible because they are directed to the abstract idea of “employing a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk.” A divided panel of the Court of Appeals reversed, holding that it was not “manifestly evident” that P’s claims are directed to an abstract idea. On rehearing en banc, the court vacated the panel opinion and affirmed the judgment of the District Court. The plurality concluded that petitioner’s claims “draw on the abstract idea of reducing settlement risk by effecting trades through a third-party intermediary,” and that the use of a computer to maintain, adjust, and reconcile shadow accounts added nothing of substance to that abstract idea. The Supreme Court granted certiorari.