The Supreme Court has considered the limits of patent eligibility over the last five years in three different cases. In Bilski v. Kappos, 561 U. S. 593, 130 S. Ct. 3218, 177 L. Ed. 2d 792 (2010), the Court held that a particular computer-implemented method for hedging against the financial risk of price fluctuations is not eligible for patent protection. In Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U. S. ___, 132 S.Ct. 1289 (2012), the Court held that a process relating to the use of thiopurine drugs to treat autoimmune diseases is not patent-eligible. In Alice Corp. Pty. Ltd. v. CLS Bank International, 573 U.S. __, 134 S. Ct. 2347 (2014), the Court held that certain patent claims directed to computer-implemented methods and systems for mitigating settlement risk are not patent-eligible.

The three decisions were narrow in scope in that the Supreme Court merely held that those specific inventions were not patent-eligible. However, the three decisions have been seized upon by accused infringers to argue that many existing patents relating to computer-implemented inventions or within the field of biotechnology are invalid before federal district courts, Patent Trial and Appeal Board (PTAB) panels and federal appellate courts. Patent examiners have also relied upon these decisions to reject pending patent applications in these fields.

The Supreme Court Provided a Framework for Analyzing Computer-Related and Biotech Inventions

The Supreme Court did not draw a clear line between a patent-eligible invention and an ineligible invention in the three decisions. The Court did provide a framework for analyzing patent eligibility in the Mayo decision, which was used by the Court in Alice to invalidate the patents-at-issue.

The Mayo/Alice framework requires a court to examine each claim using a two-step process. In the first step, the court must examine each claim as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application. In the second step, the court examines the individual elements of each claim to try to identify an “inventive concept” that transforms the claim into a patent-eligible invention. A court can also consider whether a claim preempts one or more fields of invention. 

Mayo/Alice Framework for Invalidating Existing Patents

The Mayo/Alice framework has been very useful for invalidating existing patents. Over 150 PTAB decisions and 70 federal district-court decisions have relied upon the Alice decision to invalidate issued patents. At least 13 decisions by the U.S. Court of Appeals for the Federal Circuit (the Federal Circuit), the federal appellate court that considers most patent appeals in the U.S., have affirmed district-court decisions that invalidated patents using the Alice decision.

The Alice decision has encouraged a large number of accused infringers to initiate patent-invalidating proceedings in the PTAB and to file motions seeking to invalidate patents in federal courts. PTAB panels have confirmed the validity of computer-related inventions in fewer than 20 cases. Similarly, federal district courts have denied motions seeking to invalidate patents in a handful of decisions.

The Federal Circuit has upheld the validity of a computer-implemented decision in a single case, DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014).