CLS Bank International must face infringement claims filed by an Australian patent owner over ways to minimize risk in certain computerized trading platforms, a U.S. appeals court ruled today.
The U.S. Court of Appeals for the Federal Circuit in Washington said a judge was wrong to rule that patents owned by Alice Corp. were invalid because they covered an abstract idea rather than an actual invention.
London-based CLS, which settles about $4.5 trillion in foreign-exchange transactions daily, had sued in 2007 to invalidate the patents, and Alice responded by saying CLS infringed the patents.
In a 2-1 ruling, the court said two recent Supreme Court decisions, including a March case that limited patents for diagnostic medical tests, don’t preclude obtaining patents unless it is “manifestly evident” that they cover abstract ideas. CLS can challenge the patents on other grounds, such as whether they are new or obvious variations of others’ work.
“The abstractness of the ‘abstract ideas’ test to patent eligibility has become a serious problem, leading to great uncertainty and to devaluing of inventions of practical utility and economic potential,” Circuit Judge Richard Linn wrote for the majority.
Circuit Judge Sharon Prost disagreed, saying the high-court rulings were “hinting (not so tacitly) that our subject matter patentability test is not sufficiently exacting.”
The case is CLS Bank v. Alice Corporation, 11-1301, U.S. Court of Appeals for the Federal Circuit (Washington). The lower-court case is CLS Bank International v. Alice Corp., 07cv974, U.S. District Court for the District of Columbia (Washington).
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