On May 10, 2013, the U.S. Court of Appeals for the Federal Circuit issued a per curiam opinion affirming the district court’s ruling that Alice Corporation’s (“Alice”) system, method, and computer-readable media claims are directed to ineligible subject matter under 35 U.S.C. § 101.
While processes, machines, manufactures, and compositions of matter are patent eligible, laws of nature, natural phenomena, and abstract ideas are not. The court accepted the CLS Bank v. Alice Corp. case en banc to consider two issues: (1) what test should the court adopt for determining if a computer-implemented invention is patent ineligible “abstract idea” and when does a computer lend patent eligibility to an otherwise ineligible idea and (2) should it matter whether the invention is claimed as a method, system, or storage medium, and should such claims be considered equivalent for purposes of Section 101? The court’s 100+ page decision did not resolve either of these questions. While seven of the ten judges agreed the method and computer-readable claims were invalid, there was no majority agreement with respect to the rationale. In addition to the per curiam opinion, the court issued five other deeply divided opinions, with none garnering majority support.
A. The Facts of CLS Bank v. Alice Corp
CLS Bank International (“CLS”) filed a declaratory judgment action against Alice for noninfringement, invalidity, and unenforceability of Alice’s patents. Alice owned a family of patents with method, system, and computer-readable media claims directed to “the management of risk relating to specified, yet unknown future events.” Generally, the claims covered using a computer to reduce the risk associated with completing financial transactions between two parties by using a third entity to verify each party has sufficient assets to complete the transaction.
B. The Court’s Decisions
1. The Per Curium Opinion
The court issued a one-paragraph per curium decision affirming the district court’s decision that the computer implemented method claims, computer-readable media, and system claims were invalid under 35 U.S.C. § 101.
2. Judge Lourie’s Concurring Opinion
Joined by Judge Dyk, Prost, Reyna, and Wallach, Judge Lourie’s concurring opinion (“the Lourie Opinion”) would affirm the lower court’s holding that all the claims fail to recite patentable subject matter as provided by 35 U.S.C. § 101. The Lourie Opinion centers on the abstract nature of Alice’s patents after finding that all of Alice’s patent claims are directed toward either processes or machines.
The Lourie Opinion offers an “integrated approach” based on Supreme Court precedent to determine patent eligibility. Guided by concerns related to patents preempting the fundamental tools of discovery, formalistic manipulation of claims by patent drafters, and rigid approaches to determining subject matter, the Lourie Opinion relies heavily on the “inventive concept” of the patent. Under the Lourie Opinion’s reasoning, human ingenuity must produce an “inventive concept” that differs from the abstract idea. Further, merely appending trivial and routine limitations to a core abstract idea fails the inventive concept test.
On this basis, Judge Lourie determined that the claims are directed to an abstract idea of “reducing settlement risks by effecting trades through a third party intermediary empowered to verify that both parties can fulfill their obligations before allowing the exchange-i.e., a form of escrow.” The Lourie Opinion reasoned that the concept of escrow was “a ‘disembodied’ concept, a basic building block of human ingenuity, untethered from any real-world application.” Additionally, the Lourie Opinion found none of the additional claim language added meaningful limitations. As such, the Lourie Opinion reasoned that validating Alice’s claims “would pre-empt use [of a financial intermediary to reduce risk] in all fields.” Accordingly, it found the method, system, and computer-readable medium claims invalid because each merely recites the same abstract idea in different forms.
3. Concurring-In-Part And Dissenting-In-Part Opinion
Four judges, Chief Judge Radar and Judges Linn, Moore, and O’Malley, collectively offered another opinion (“the Radar Opinion”) that would hold the system claim valid. The Radar Opinion emphasized the limitations surrounding denying patentability based on abstractness. Indeed, the Radar Opinion suggests that a patent claim is only directed to an abstract idea when one must “necessarily” infringe the claims if one wanted to employ the abstract idea at issue. Noting that the concept of an escrow account could be performed without the use of a specially programmed computer, the Radar Opinion found the system claims valid.
Judges Linn and O’Malley depart ways from Part IV of the Radar Opinion. In Part IV of the Radar Opinion, Chief Judge Radar and Judge Moore would hold the method claims invalid because all of the method’s claim limitations are inherent in the concept of an escrow.
4. Judge Moore’s Dissenting-In-Part Opinion
Judge Moore wrote a dissenting-in-part opinion (“the Moore Opinion”), joined by Chief Judge Rader and Judges Linn and O’Malley. The Moore Opinion emphasized disagreement with the Lourie Opinion’s reasoning, noting “my colleagues trample on a mountain of precedent that requires us to evaluate each claim as a whole when analyzing validity.” Of particular note, Judge Moore reasons that the “inventive concept” approach offered by the Lourie Opinion merely applies the “heart of the invention” analysis abolished by the 1952 Patent Act. Additionally, Judge Moore believes the Lourie Opinion’s rationale, especially as applied to system claims, would invalidate hundreds of thousands of existing patents directed towards business methods, financial systems, and software along with many computer implemented and telecommunications patents.
5. Judge Newman’s Concurring-In-Part And Dissenting-In-Part Opinion
Judge Newman wrote separately (“the Newman Opinion”) to emphasize that much of the concern about subject matter eligibility could be ameliorated if the courts broadly exempted scientific inquiry and experimentation from patent infringement. Judge Newman reasons that section 101 cannot and need not provide a threshold test for patentability with respect to abstract ideas. Instead, the Newman Opinion provides “the debate involving section 101 would fade away, on clarification of the right to study and experiment with the knowledge disclosed in patents.” As such the Newman opinion would reaffirm three principles of patent law. First, 101 is an inclusive statement of patent-eligible subject matter. Second, the form of the claim does not determine eligibility. And finally, experimental use of patented information is not barred.
6. Judges Linn And O’Malley’s Dissenting Opinion
Judges Linn and O’Malley’s collective dissenting opinion (“the Linn Opinion”) would hold the method claims valid. The Linn Opinion reasons, based on an analysis of the factual record, that the method claims contain language directed toward the same computer hardware as that of the system claims. As such, under the Linn Opinion’s reasoning, the method claims are valid for the same reasons as the system claims.
7. Judge Rader’s Additional Reflections
In a section entitled “Additional Reflections,” Judge Rader writes to direct his fellow judges to “consult the statute!” Judge Radar reasons that the statute provides the best guidance when determining patent eligibility, and believes inventiveness is best left to the novelty (35 U.S.C. § 102) and obviousness (35 U.S.C. § 103) sections of the statute. This approach contrasts with Judge Lourie’s approach. Indeed, Judge Radar expresses skepticism as to the usefulness of Judge Lourie’s inventive concept test. He reasons that such a test leaves judges and lawyers the task of solving the mystery as to what words like “contribution” or “inventiveness” mean.
C. Invitation to Supreme Court to Settle the Issue
The one issue that the judges appear to agree upon is that there is a need for Supreme Court guidance. For example, the Radar Opinion invites the Court’s review, noting “[t]his case presents the opportunity for the Supreme Court to distinguish between claims that are and are not directed toward patentable subject matter” (emphasis in original). Likewise, Judge Newman noted “we have propounded at least three incompatible standards, devoid of consensus.” Thus, the answers to the questions for which CLS Bank v. Alice Corp. was originally taken en banc may best be solved by the Supreme Court.
 A “per curiam” decision is a ruling issued by an appellate court in which the decision is made by the majority of the court acting collectively and anonymously.
 CLS Bank Int’l v. Alice Corp. Pty, No. 2011-1301, 2013 U.S. App. LEXIS 9493 (Fed. Cir. May 10, 2013) (Circuit Judge Taranto did not participate)
 See Mayo v. Prometheus, 132 S. Ct. 1289, 1294 (citing Parker v. Flook, 437 U.S. 584, (1978)).