Free for a Fee

Over the course of the past year a case about four financial software patents has taken on great significance. In 2007, Alice Corp accused CLS Bank of infringing its patents on a type of computerized trading platform that used “shadow accounts.” In the years since then, the Supreme Court has significantly tightened up the rules about what is patentable. In 2011, Alice’s patents were thrown out by a federal judge, who ruled they didn’t cover patentable subject matter.Last year, Alice won a surprising reversal. An appeals panel ruled 2-1 that Alice’s patents should be allowed after all, suggesting only the most abstract of claims should be barred from winning patents under Section 101. The third judge, US Circuit Judge Sharon Prost, wrote a blistering dissent, suggesting that the ruling violated Supreme Court guidance, by allowing a patent on a financial technology that was “literally ancient.”

With the waters thus muddied, the Federal Circuit, which hears all patent appeals, made the choice to reconsider CLS Bank v. Alice Corp. as an “en banc” case that all the judges would weigh in on.

more