CLS v Alice decision may be the “death” of US business method patents

Managing IP is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

CLS v Alice decision may be the “death” of US business method patents

The validity of hundreds of thousands of business method patents is uncertain after the Federal Circuit narrowly upheld the district court’s decision in CLS v Alice that four patents are invalid under Section 101

In a 135-page decision published on Friday by a strongly divided court, the 10 judges on the en banc panel issued seven conflicting opinions on whether Alice’s claims relating to a computerised trading system are patent-eligible.

Seven of the judges affirmed the district court’s ruling that the method and computer-readable media claims are not patent eligible. The judges were equally divided on whether the system claims were patent eligible, meaning that the district court’s decision was upheld.

In a dissenting-in-part opinion joined by three other judges, Judge Moore said the decision would lead to the "death" of hundreds of thousands of software and business method patents. She said the decision gave "staggering breadth to what is meant to be a narrow judicial exception".

She added: “There has never been a case which could do more damage to the patent system than this one.” In an opinion titled “Additional reflections”, Chief JudgeRader lamented that there was “little, if any, agreement amongst” the judges.

The disagreement between the judges may lead to the case being taken up by the Supreme Court.

The Court was rehearing the case after overturning its controversial 2-1 panel decision in July last year to affirm Alice’s patent claims for a computerised trading system that minimises risk.

In the previous split decision, the judges concluded that merely using a computer did not prevent Alice’s claims from being regarded as patent-ineligible abstract ideas. However, the 2-1 majority said that computer implementation was crucial to the system’s function as an intermediary between traders.

The case dates back to CLS's 2007 lawsuit which sought to invalidate Alice's patents. Alice counterclaimed that CLS was infringing claims 33 and 34 of its US patent number 5,970,479 and all claims of its US patents numbers 6,912,510; 7,149,720; and 7,725,375.

more from across site and SHARED ros bottom lb

More from across our site

Counsel at three firms reveal the tools they’re using to generate patent invalidity claim charts and why they’re making investments in the technology
Eric Lee says the firm’s thought leadership on artificial intelligence convinced him to move
McKool Smith and Arnold Ruess are among the firms acting for InterDigital
Law firms are developing AI tools to improve productivity and efficiency – and that is having an impact on patent and trademark work
Harpreet Dhaliwal is HGF’s first lateral partner hire since it received private equity investment at the end of last year
Munich-based Epic Legal, founded by Nicolás Schmitz and Philipp Strommer, hopes to attract market talent by abandoning old-hat systems
OpenAI’s claims that China’s DeepSeek violated its proprietary technology should prompt the US company to rethink its past actions
OpenAI’s accusation against Chinese AI tool DeepSeek and a significant licensing deal for Nokia were among the top talking points this week
Counsel weigh in on how firms should be thinking about surveys in wake of closely followed trademark ruling
Melissa Harwood, who joined this week, said she was impressed by the firm's Seattle presence and is anticipating a busy schedule
Gift this article