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CLS Bank v. Alice Corp: Abstract Ideas

CLS Bank v. Alice Corp: Abstract Ideas

This is another case looking at subject matter jurisdiction (35 USC 101) of patents.  Alice Corp sued CLS Bank for infringement under four patents.  The patents are directed to eliminating the risks associated with financial transactions. Specifically, something called settlement risk.

The Federal Circuit has ordered a rehearing of the case en banc.  In the previous opinion of the court, they found the claims were directed to an abstract idea and therefore not patent eligible.  35 USC 101 states:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

First of all let’s acknowledge that this is bad legislative drafting since section 101 talks about new and section 102 of the patent statute is directed to what is new (novelty).  Of course the AIA did not correct this poor legislative drafting, because it was too busy handing out goodies to special interest groups.

Because the “new” requirement of 35 USC 101 is redundant with that more clearly defined in 35 USC 102 we are going to ignore it and assume that the new requirement of 101 is met if the invention meets the requirements of section 102.

Second of all let’s notice that “abstract idea” is never mentioned in the statute.  Where does this theory that an abstract idea is not patent eligible come from?  It comes from the Supreme Court.  See LeRoy v. Tatham, 55 U.S. 156, 14 How. 156, 14 L.Ed. 367 (1852) and the most recent history starts with Gottschalk v. Benson, 409 U.S. 63 (1972).  Does it make any sense?  Before we can answer that we need to define what we mean by an “abstract idea.”  Some of the potential definitions of “Abstract” from are provided below:

1. Considered apart from concrete existence: an abstract concept.

2. Not applied or practical; theoretical. See Synonyms at theoretical.

3. Difficult to understand; abstruse: abstract philosophical problems.

4. Thought of or stated without reference to a specific instance: abstract words like truth and justice.

5. Impersonal, as in attitude or views.

6. Having an intellectual and affective artistic content that depends solely on intrinsic form rather than on narrative content or pictorial representation: abstract painting and sculpture.


Clearly the first or second definitions appear to be the closest to what the Supreme Court means when speaking of patents.  Now here are some of the definitions of “idea” from the same source.


1. Something, such as a thought or conception, that potentially or actually exists in the mind as a product of mental activity.

2. An opinion, conviction, or principle: has some strange political ideas.

3. A plan, scheme, or method.

4. The gist of a specific situation; significance: The idea is to finish the project under budget.

5. A notion; a fancy.


The first definition appears to be the most appropriate.  So what we end up with is a thought or conception that is separate from concrete existence or not applied to the practical.  None of the judges using the “Abstract Idea” standard have bothered to define what they mean by these words.  In the broadest sense of the word abstract, every patent defines an invention that has been abstracted.  An invention by definition is an abstraction or a category of things.  If this is what the judges mean, then the standard is complete nonsense, since it negates every patent.  Not defining your terms leads to an Alice in Wonderland world, where words mean whatever the person using them wants them to mean and the reader/listener has no idea what they are talking about.  Failure to define one’s term is the province of charlatans.

If we use the definition of an Abstract Idea given above “a thought or conception that is separate from concrete existence or not applied to the practical”, then every invention that meets the requirements of 35 USC 112 first paragraph is not an Abstract Idea, since this section requires that the invention be described in a manner so one skilled in the art can practice the invention.  Something that can be built and used (practiced) is concrete and applied, therefore it is not an abstract idea.  The ABSTRACT IDEA exclusion to 35 USC 101 should be dropped, because any logical definition of an abstract idea is excluded by 35 USC 112, first paragraph.  It should also be dropped, because, Judges should not read into statutes things that are not there.

A truly Abstract Idea is not a “process, machine, manufacture, or composition of matter” under 35 USC 101.  The Court need proceed no farther.  But the real thrust behind the Abstract Idea exclusion is to provide a broad (arbitrary) basis for Judges who do not like patents or do not like software patents or patents directed to financial transactions or directed to medical technology to rule patents invalid.  This turns patent law into nothing more than glorified politics.  It is shameful act by a bunch of charlatans and they are getting away with it, because litigants have not demanded terms be defined.

The CLS Bank v. Alice Corp case is nothing more than an attempt to steal the invention of Alice corporation, by a Kangaroo Court methods. 

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