2011-1301

United States Court of Appeals for the Federal Circuit

CLS BANK INTERNATIONAL,

Plaintiff-Appellee, and

CLS SERVICES LTD., Counterclaim-Defendant Appellee,

v. ALICE CORPORATION PTY. LTD.,

Defendant-Appellant.

Appeal from the United States District Court for the District of Columbia in case no. 07-CV-0974, Judge Rosemary M. Collyer

BRIEF OF AMICUS CURIAE THE AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION IN SUPPORT OF ALICE

CORPORATION PTY. LTD. __________________

JEFFREY I.D. LEWIS President AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION 241 18TH Street, South Suite 700 Arlington, VA 22202 (703) 415-0780

JERRY R. SELINGER GERO MCCLELLAN PATTERSON & SHERIDAN, LLP 1700 Pacific Ave., Suite 2650 Dallas, TX 75201 (214) 272-0957

Attorneys for Amicus Curiae American Intellectual Property Law Association

JANUARY 17, 2013

COUNSEL PRESS, LLC (202) 783-7288 * (888) 277-3259 245620

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

CLS BANK v. ALICE CORPORATION, 2011-1301

CERTIFICATE OF INTEREST

Counsel for amicus curiae, the American Intellectual Property Law

Association, certifies the following:

1. The full name of every party or amicus represented by us is:

The American Intellectual Property Law Association

2. The full name of the real party in interest (if the party named in the·

caption is not the real party in interest) represented by us is:

Not applicable.

3. All parent corporations and any publicly held companies that own 10

percent or more of the stock of the party or amicus curiae represented by us are:

Not applicable.

4. The names of all law firms and the partners or associates that

appeared for the party or amicus now represented by us in the trial court or agency

or who are expected to appear in this court are:

Jerry R. Selinger Gero McClellan PATTERSON & SHERIDAN, LLP

Jeffrey I.D. Lewis

i

AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION January 17, 2013 _____________________

Jerry R. Selinger

ii

TABLE OF CONTENTS

Page

CERTIFICATE OF INTEREST ................................................................................. i 

TABLE OF AUTHORITIES ................................................................................... iii 

STATEMENT OF INTEREST OF AMICUS CURIAE ........................................... iii 

SUMMARY OF ARGUMENT ................................................................................. 2 

ARGUMENT ............................................................................................................. 4 

I.  DISTINGUISHING AN “ABSTRACT IDEA” FROM AN APPLICATION OF AN ABSTRACT IDEA REQUIRES ANALYSIS AND CONSIDERATION OF ALL CLAIMED FEATURES. ........................................................................................................ 4 

A.  Overarching Principles for a § 101 Analysis. ................................................ 5 

B.  The Supreme Court’s § 101 Decisions. ......................................................... 6 

C.  Application of the § 101 Jurisprudence to Computer-Implemented Inventions. ............................................................................... 9 

D.  The Presence of a Computer May Lend Patent Eligiblity to an Otherwise Patent-Ineligible Idea. ................................................................ 12 

II.  THE FORM OF THE CLAIM DOES NOT CHANGE THE §101 ANALYSIS. ....................................................................................................... 13 

III. BASED ON THE DEGREE OF DETAIL OF THE CLAIMS AS A WHOLE, THE CLAIMED INVENTION IS A PATENT-ELIGIBLE APPLICATION OF AN ABSTRACT IDEA................................. 14 

IV. CONCLUSION .................................................................................................. 18 

iii

TABLE OF AUTHORITIES

Page(s) Cases

Bancorp Servs., LLC v. Sun Life Assurance Co., 687 F.3d 1266 (Fed. Cir. 2012)............................................................................ 11

Bilski v. Kappos, 130 S. Ct. 3218 (2010) ................................................................................. passim

CLS Bank Int’l v. Alice Corporation Pty. Ltd, 685 F.3d 1341 (Fed. Cir. 2012) (vacated) ......................................................14, 15

CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011)............................................................................ 10

Dealertrack, Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012)............................................................................ 10

Diamond v. Diehr, 450 U.S. 175 (1981) ..................................................................................... passim

Fort Props. Inc. v. Am. Master Lease LLC, 671 F.3d 1317 (Fed. Cir. 2012)............................................................................ 10

Gottschalk v. Benson, 409 U.S. 63 (1972) ............................................................................................. 6, 7

In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994) (en banc) ............................................................. 17

Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289 (2012) .................................................................................. passim

Parker v. Flook, 437 U.S. 584 (1978) ..................................................................................... passim

Research Corp. Techs., Inc. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010).............................................................................. 11

SiRF Tech., Inc. v. ITC, 601 F.3d 1319 (Fed. Cir. 2010)......................................................................11, 13

iv

Typhoon Touch Technologies, Inc. v. Dell, Inc., 650 F.3d 1376 (Fed. Cir. 2011)............................................................................ 17

Statutes

35 U.S.C. §101 ................................................................................................. passim

35 U.S.C. §102 .....................................................................................................5, 15

35 U.S.C. §103 .....................................................................................................5, 15

35 U.S.C. §112 .....................................................................................................5, 15

Other Authorities Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos, 75 Fed. Reg. 43922 (July 27, 2010) ......................................................................... 11

1

STATEMENT OF INTEREST OF AMICUS CURIAE

The American Intellectual Property Law Association (“AIPLA”) is a

national bar association of approximately 14,000 members engaged in all areas of

intellectual property law. AIPLA members include attorneys and patent agents

employed in private practice and by corporations, universities, and government.

AIPLA members represent owners and users of intellectual property across the

entire business spectrum, from very large corporations to individual inventors, and

in essentially all areas of technology. The en banc Court’s questions relate to

issues that are of significant interest to AIPLA and its members.

AIPLA has no interest in any of the parties to this litigation or in the

outcome of this case. Its only interest here is in seeking correct and consistent

interpretation of the law.1

1 Amicus AIPLA files this brief pursuant to the authority granted in

paragraph (5) of this Court’s Order of October 9, 2012. After reasonable investigation, AIPLA believes that (i) no member of its Board or Amicus Committee who voted to file this brief, or any attorney in the law firm or corporation of such a member, represents a party to this litigation in this matter, (ii) no representative of any party to this litigation participated in the authorship of this brief, and (iii) no one other than AIPLA, or its members who authored this brief and their law firms or employers, made a monetary contribution to the preparation or submission of this brief.

2

SUMMARY OF ARGUMENT

In this case, the Court once again returns to the challenge of analyzing patent

eligible subject matter under 35 U.S.C. §101 and, in particular, the judicial

exclusion of abstract ideas as patent-ineligible. AIPLA answers the questions on

which briefing is invited as follows:

1. What test should the Court adopt to determine whether a computer-implemented invention is a patent ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea? The Supreme Court has cautioned that there is no comprehensive, talismanic

test for identifying patent claims directed only an abstract idea. Bilski v. Kappos,

130 S. Ct. 3218, 3231 (2010). Any attempt to contrive one would be futile and

unwise. In an effort to strike a careful balance when analyzing process claims

under §101 the Supreme Court’s decision of Diamond v. Diehr, 450 U.S. 175, 184-

85 (1981) articulated the foundational principle that the §101 analysis begins with

a careful reading of the claim, including all of the detailed features set forth

therein. Thus, the patent-eligibility determination is made based on the claim as a

whole and depending on the degree of detail found in the claimed application of an

abstract idea.

The mere presence of a computer in a claim, generally implementing an

abstract idea, does not necessarily lend patent eligibility to an otherwise patent-

ineligible claim. However, a computer limitation may contribute to the patent

3

eligibility of a claim if the claim spells out specific uses of the computer in a way

that impose meaningful limits on the scope of the claim, demonstrating more than

a superficial role of the computer in permitting a claimed method to be performed

or in providing it useful structure.

In its amicus curiae brief filed in support of neither party, the Government

sets forth a non-exhaustive list of factors to consider in analyzing computer-

implemented inventions under §101, which factors can be gleaned from the

decisions of the Supreme Court and this Court. Gov’t. Br. at 13-14. AIPLA

endorses the use of these factors, and others as appropriate, applied on a case-by-

case basis to each claim as a whole, as a framework to guide the analysis of

computer-implemented inventions under §101.

2. In assessing patent eligibility under 35 U.S.C. §101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for §101 purposes? In the determination of patent eligibility, method, system and storage

medium claims, while not equivalent, should be evaluated under the same flexible

test. The presence and use of a computer or other hardware in a claim, whether

part of the structure or a key element of the process, is but one of the factors that

should be considered in determining patent eligibility.

4

ARGUMENT

I. DISTINGUISHING AN “ABSTRACT IDEA” FROM AN APPLICATION OF AN ABSTRACT IDEA REQUIRES ANALYSIS AND CONSIDERATION OF ALL CLAIMED FEATURES.

The United States patent system plays a critical role in promoting

technological innovation that drives the country’s economic growth. Section 101

of the Patent Act broadly identifies the categories of patent eligible subject matter,

but the Supreme Court has long recognized implicit exceptions for laws of nature,

natural phenomena and abstract ideas. The Court has explained that these

categories of exemptions represent the basic tools of scientific and technological

work that must remain available to all. However, it has also recognized that the

patent eligibility determination requires a delicate balance, and that “too broad an

interpretation of this exclusionary principle could eviscerate patent law.” Mayo

Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289, 1293 (2012).

This balance must be struck on a case-by-case basis because there is no

single bright-line test for determining patent-eligibility under §101. The Supreme

Court’s decision in Diehr, and its recent decisions in Bilski and Mayo underscore

the need for a flexible framework for a case-by-case patent-eligibility analysis

under §101. The Court recognized that this need for flexibility is important in this

context because “new technologies may call for new inquiries.” Bilski, 130 S. Ct.

at 3228. This Court’s recent jurisprudence on computer-implemented methods,

5

including the panel decision in this case, implements the flexible, case-specific

approach that the Supreme Court has also applied in this area.

A. Overarching Principles for a § 101 Analysis.

In Diehr, the Supreme Court crystallized three important aspects of an

analysis under § 101 which together strike an appropriate balance of protecting

patent-eligible inventions without preempting the use of abstract ideas, laws of

nature and natural phenomena. First, each claim must be considered as a whole.

450 U.S. at 188. The Diehr Court held that it is inappropriate to dissect claims in

order to analyze them for purposes of §101. Id.

Second, “[t]he ‘novelty’ of any element of steps in a process, or even of the

process itself, is of no relevance in determining whether the subject matter of a

claim falls within the § 101 categories of possibly patentable subject matter.” Id. at

188-89. Whether subject matter is a patent-ineligible abstract idea under § 101 is

separate and distinct from an analysis for other relevant conditions and

requirements, namely §§102, 103 and 112. See, e.g., Bilski, 130 S.Ct. at 3225.

Third, case-specific analysis of the details of each patent claim at issue is

required to determine whether there are meaningful limits on the scope of the

claim. Diehr, 450 U.S. at 191-92. Just as the claim should not be dissected to

perform the §101 analysis, it should not be distilled to the “inventive concept” or

the “heart of the invention,” thereby ignoring the detailed features of the claimed

invention. As demonstrated by the Supreme Court’s opinions in Diehr and Mayo,

6

patent eligibility must be evaluated based on what the claims recite, not merely on

the ideas upon which they are premised, and a court must consider the asserted

claims as a whole. To do otherwise would lead to a preordained conclusion of

patent-ineligibility inasmuch as “all inventions at some level embody, use, reflect,

rest upon or apply laws of nature, natural phenomena or abstract ideas.” Mayo,

132 S. Ct. at 1293.

With these overarching principles as a guide, the Supreme Court has

considered what constitutes patent-eligible subject matter, as distinguished from

abstract ideas, laws of nature and natural phenomena for which no patent rights

should be conferred.

B. The Supreme Court’s § 101 Decisions.

The relevant computer-related Supreme Court decisions were not decided by

applying some bright line test. Instead, as discussed below, the Court considered

the specific details in the record for the patents under considerations.

The case of Gottschalk v. Benson, 409 U.S. 63 (1972) involved an invention

related to the programmed conversion of numerical information in general-purpose

digital computers and, in particular, to a method for converting binary-coded

decimal numerals into pure binary numerals. Although the Supreme Court recited

the general proposition that abstract ideas are not patentable “as they are the basic

tools of scientific and technological work,” id. at 67, it looked to the particulars of

7

the claim in question to explain its specific holding that the claim at issue was

ineligible for patent protection under § 101:

The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself.

Id. at 71-72.

The case of Parker v. Flook, 437 U.S. 584 (1978) involved patent claims

covering “any use of a formula for updating the value of an alarm limit on any

process variable involved in a process comprising the catalytic chemical

conversion of hydrocarbons.” Id. at 586. In reaching its conclusion that the

claimed invention was ineligible for patent protection, the Supreme Court was

careful to note that the patent application did not specifically explain how the

variables used in the formula were to be selected, and contained no disclosure

relating to the chemical processes at work or the means of setting off an alarm. Id.

at 586.

Diehr was the next Supreme Court case to consider a patent claim involving

a programmed digital computer. The Court majority held that the recited “physical

and chemical process for molding precision synthetic rubber products falls within

the § 101 categories of possibly patentable subject matter.” Diehr, 450 U.S. at

8

184. Once again, the Supreme Court engaged in a case-specific analysis,

distinguishing Flook on the ground that the patent application in that case

did not purport to explain how these other variables [for an updated alarm] were to be determined, nor did it purport ‘to contain any disclosure relating to the chemical processes at work, the monitoring of process variables, or the means of setting off an alarm or adjusting the alarm limit. All that it provides is a formula for computing an updated alarm limit.’

Id. at 186-87 (quoting Flook, 437 U.S. at 586). By contrast, the Diehr Court

described the claimed process as drawn to an industrial process for the molding of

rubber products, making it patent-eligible under § 101. Id. at 192-93.

In its 2010 decision of Bilski, the Supreme Court directly addressed the

question of what constitutes an abstract idea in the context of a § 101 inquiry. The

Court found this Court’s “machine or transformation” inquiry to be a useful

consideration, though not the sole test, and expressly warned against adoption of

“categorical rules that might have wide-ranging and unforeseen impacts.” Bilski,

130 S.Ct. at 3230. After a record-specific analysis, the Court concluded that

“[Bilski’s] claims are not patentable processes because they are attempts to patent

an abstract idea.” Id. at 3230-31.

More recently, the Mayo Court considered claims directed to methods of

adjusting drug dosages to treat patients suffering from autoimmune diseases. Here

again, the Court focused on the degree of detail in the record to determine

“whether the claims do significantly more than simply describe those natural

9

relations [between concentrations of metabolites and the effectiveness of a drug

dosage]” and recite the step of applying the natural law. Mayo, 132 S. Ct. at 1297.

In reaching this conclusion, the Court distinguished the details of the patent

application in Diehr based on “the way the additional steps of the process

integrated the equation into the process as a whole,” and then proceeded to spell

out the details of that patent application which demonstrated the point. Id. at 1298-

99.

In sum, the Supreme Court’s decisions in Benson, Flook, Diehr, Bilski and

Mayo require that a § 101 analysis include a case-specific inquiry into whether the

claim, considered as a whole, includes “meaningful” limitations beyond an abstract

idea, natural law or natural phenomenon.

C. Application of the § 101 Jurisprudence to Computer-Implemented Inventions.

Whether or not a computer-implemented invention is a patent eligible,

practical application of an “abstract idea” is best determined by a case-specific

analysis of the details of each claim of the patent in suit, considering the claim as a

whole. A computer-implemented invention is patent-eligible if the claim, read as a

whole, describes particular uses of the computer to implement the invention, not

just a general idea. The focus on the details in the record of the specific patent

provides a sound foundation for analyzing the degree of detail in a claim

challenged under § 101.

10

As the Government’s amicus brief aptly describes, this Court’s application

of the Bilski decision in its § 101 analyses of computer-implemented inventions

has resulted in the identification of various factors that may bear on the patent-

eligibility of such inventions. Gov’t. Br. at 13-14. These factors include:

• whether the computer is recited in a manner that is only nominally or

tangentially related to the performance of the invention (e.g., recording the

results of a process on a computer), see, e.g., Fort Props. Inc. v. Am. Master

Lease LLC, 671 F.3d 1317, 1323-24 (Fed. Cir. 2012); CyberSource Corp. v.

Retail Decisions, Inc., 654 F.3d 1366,1370 (Fed. Cir. 2011);

• whether the computer is generically recited in a manner that would

encompass any machine capable of performing the claimed steps, or whether

specific, unconventional computer equipment, tools, or processing

capabilities are required, see, e.g., Dealertrack, Inc. v. Huber, 674 F.3d

1315, 1333-34 (Fed. Cir. 2012);

• whether the invention involves an improvement in the ability of the

computer to function as a computer, or whether the invention relates

principally to an unrelated, non-technological field (e.g., “instruct[ing] how

business should be conducted,” Bilski, 130 S. Ct. at 3229);

• whether the claim recites a computerized device that manipulates particular

data in particular, specific, and useful ways, e.g., rendering a digital image

11

as in Research Corp. Techs., Inc. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir.

2010) or processing GPS satellite signals to identify a discrete physical

location on Earth as in SiRF Tech., Inc. v. ITC, 601 F.3d 1319 (Fed. Cir.

2010), or whether the computer is recited solely for its generic functions of

automating tasks or communicating over a distance, as in Bancorp Servs.,

LLC v. Sun Life Assurance Co., 687 F.3d 1266 (Fed. Cir. 2012);

• whether (as in Diehr) the abstract idea is bound up in an invention that

effects a transformation of matter, or whether (as in Benson and Flook) the

abstract idea is merely described in a particular environment; and

• whether the computer-related elements of the claim represent conventional

steps, described at a high level of generality, that would have to be employed

by any person who wished to apply the abstract idea, cf. Mayo, 132 S. Ct. at

1297-98.

Of course, not every factor will be relevant to every claim. Moreover, no

one factor is conclusive by itself, and the weight accorded each factor will vary

based upon the specific facts under consideration in a specific technological

context at a particular time. Indeed, the identified factors are not intended to be

exclusive or exhaustive. Gov’t. Br. at 14. For example, the USPTO’s Interim

Guidance for Determining Subject Matter Eligibility for Process Claims in View of

Bilski v. Kappos, 75 Fed. Reg. 43922 (July 27, 2010), provides additional, detailed

12

guidance to perform a flexible, factor-based § 101 analysis to achieve the delicate

balance required by Supreme Court jurisprudence.

In sum, AIPLA agrees with the Government’s position that this flexible,

broad legal inquiry, undertaken on a case-by-case basis, is the best means to

provide a framework to balance the § 101 analysis consistent with Supreme Court

jurisprudence.

D. The Presence of a Computer May Lend Patent Eligiblity to an Otherwise Patent-Ineligible Idea.

In the second part of the first briefing question, this Court asks when, if ever,

the presence of a computer in a claim lends patent eligibility to an otherwise

patent-ineligible idea. Assuming that the question as posed does not reflect

impermissible claim dissection, AIPLA submits that the answer depends on how

the computer is incorporated into the claim.2

It goes too far to say that the presence of a computer in a patent claim, in

itself, demonstrates that the claim recites a practical application of an abstract idea.

Rather, the claim as a whole must spell out one or more specific uses of the

computer that impose meaningful limits on the scope of the claim, demonstrating

more than a superficial role of the computer in permitting the claimed method to be

2 In Diehr, the Court stated the following: “The fact that one or more of the steps in respondents’ process may not, in isolation, be novel or independently eligible for patent protection is irrelevant to the question of whether the claims as a whole recite subject matter eligible for patent protection under §101.” Id. at 193 n.15.

13

performed or in providing it useful structure. SiRF Tech., Inc., 601 F.3d at 1333

(Fed.Cir. 2010) (“In order for the addition of a machine to impose a meaningful

limit on the scope of a claim, it must play a significant part in permitting the

claimed method to be performed, rather than function solely as an obvious

mechanism for permitting a solution to be achieved more quickly, i.e., through the

utilization of a computer for performing calculations.”)

The same case-specific approach urged above would be necessary to

evaluate a claim in which any piece of hardware is recited. As the Mayo Court

explainted, this analytic approach is the reason patent eligibility was found in

Diehr but not in Flook. Mayo, 132 S. Ct. at 1298-1301. In Diehr, the overall

process was patent-eligible because of the way the additional steps of the process

integrated the equation into the process as a whole. Mayo, 132 S. Ct. at 1298.

However, Mayo points out that the claim in Flook did not “explain how the

variables used in the formula were to be selected, nor did the [claim] contain any

disclosure relating to chemical processes at work or the means of setting off an

alarm or adjusting the alarm limit.” Id. at 1299.

II. THE FORM OF THE CLAIM DOES NOT CHANGE THE §101 ANALYSIS.

From the foregoing, the answer to the second briefing question flows

logically. In the determination of patent eligibility, method, system and storage

medium claims should be evaluated under the same flexible test. The focus should

14

be on the details in the record supporting the specific claims. These different types

of claims should not be considered equivalent for § 101 purposes, because different

claim forms may reflect different recitations of the invention with different patent

eligibility results when the claim is considered as a whole. However, the

determination must be based on the specific role of the recited hardware in the

invention when the claim is considered as a whole.

III. BASED ON THE DEGREE OF DETAIL OF THE CLAIMS AS A WHOLE, THE CLAIMED INVENTION IS A PATENT-ELIGIBLE APPLICATION OF AN ABSTRACT IDEA.

In the context of summary judgment, and drawing all reasonable inferences

in favor of the non-movant, CLS Bank failed to show by clear and convincing

evidence that the claims are not directed to the application of an abstract idea. On

the contrary, in the context of summary judgment, and under the claim construction

to which CLS Bank agreed, the panel majority reached the correct conclusion. CLS

Bank Int’l v. Alice Corporation Pty. Ltd, 685 F.3d 1341, 1345 (Fed. Cir. 2012)

(vacated).

The disagreement within the CLS Bank panel exemplifies the ongoing

struggle to determine whether the level of abstraction reflected in the claims is

patent-eligible subject matter or an unpatentable abstract idea. A review of the

claims themselves evidences their specificity and demonstrates that they do not

merely claim high-level abstract principles.

15

Claim 33 of the ’479 patent, which is representative of the method claims,

recites:

(a) creating a shadow credit record and a shadow debit record for each stakeholder party to be held independently by a supervisory institution from the exchange institutions;

(b) obtaining from each exchange institution a start-of-day balance for each shadow credit record and shadow debit record;

(c) for each transaction resulting in an exchange obligation, the

supervisory institution adjusting each respective party’s shadow credit record or shadow debit record, allowing only those [sic] transactions that do not result in the value of the shadow debit record being less than the value of the shadow credit record at any time, each said adjustment taking place in chronological order; and

(d) at the end-of-day, the supervisory institution instructing one of the

exchange institutions to exchange credits or debits to the credit record and debit record of the respective parties in accordance with the adjustments of the said permitted transactions, the credits and debits being irrevocable, time invariant obligations placed on the exchange institutions.

The patent-eligibility of this claim is properly focused on the degree of detail

reflected in the claim, considered as a whole, and is independent of, and precedes,

analysis under 35 U.S.C. §§ 102, 103 and 112. Assuming, arguendo, that the

“basic idea behind the claimed invention is the use of an intermediary in a financial

transaction,” 685 F.3d at 1357, the claim defines a specific application of that basic

idea in a particular way that does not preempt the basic idea. Alternative

unclaimed implementations remain available.

16

Based on the record before the Court, the computer is an integral aspect of

the claimed process. The application is specific in that it involves manipulation of

the values of the shadow credit record and the shadow debit record. Those

“shadow” objects correspond to specific account balances, without implicating or

interfering with the account balances themselves, which is an application of the

abstract idea that weighs in favor of eligibility. Moreover, the specific form of

manipulation imposes meaningful limits on the execution of the claimed method

steps and thus further weighs in favor of patentability. The application is particular

to those limited fields of endeavor in which parties have credit and debit records at

exchange institutions. No subjective determination is involved. The application

does not involve either insignificant post-solution activity or the type of field-of-

use recited but rejected in Flook. The application is limited to evaluating each

transaction in chronological order rather than in one of the many alternative

possibilities. Finally, the performance of the process is observable and verifiable.

These factors, considered in their totality, indicate that method claim 33 does not

merely recite an abstract idea.

Claim 1 of the ’720 patent is representative of the system claims. In addition

to the specific application described above in the analysis of the method claims, the

data processing system includes “a data storage unit” storing information about “a

shadow credit record and a showed debit record . . . independent from a credit

17

record and debit record maintained by an exchange institution.” Segregating those

shadow credit and debit records constitutes, as specifically claimed, one particular

form of implementation.

The claim also recites “a computer . . . configured to (a) receive a

transaction, (b) electronically adjust said shadow credit and/or shadow debit . . . ;

and (c) generate an instruction . . . wherein said instruction being an irrevocable,

time invariant obligation placed on said exchange institution.” The phrase

“configured to” requires that the computer be actually programmed to perform the

recited functionality. See, e.g., Typhoon Touch Technologies, Inc. v. Dell, Inc.,

650 F.3d 1376, 1380 (Fed. Cir. 2011). The system claim is implemented using a

particular combination of data storage unit and a specially-programmed computer.

In this respect, the claim is not merely to a general purpose computer, but

analogous to the computer in In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994) (en

banc).

Turning last to the representative “computer readable storage medium”

claim, claim 39 of the ‘375 patent, the claim defines a specific article of

manufacture that contains specific computer code which allows the medium to

work cooperatively to perform a unique and limited function. Cf. Alappat, 33 F.3d

at 1545. The claim expressly recites an article of manufacture, in addition to the

specific details of implementation discussed above. This is an additional factor

that weighs in favor of patent-eligibility.

The claimed subject matter in all three of the representative claims is to a

specific implementation of the idea of eliminating settlement risk. None of the

three representative claims cover all solutions to the problem. Therefore, the three

representative claims define patent-eligible subject matter under § 101.

IV. CONCLUSION In view of the foregoing, the Final Judgment of the district court should be

reversed.

January 17, 2013 Respectfully submitted,

______________________________ Jerry R. Selinger Gero McClellan PATTERSON & SHERIDAN, LLP 1700 Pacific, Suite 2650 Dallas, Texas 75201 Telephone: 214-272-0957

ATTORNEYS FOR AMICUS CURIAE American Intellectual Property Law Association

18

United States Court of Appeals for the Federal Circuit

CLS BANK v. ALICE CORPORATION, 2011-1301

CERTIFICATE OF SERVICE

I, John C. Kruesi, Jr., being duly sworn according to law and being over the age of 18, upon my oath depose and say that: Counsel Press was retained by Patterson & Sheridan, LLP, Attorneys for Amicus Curiae The American Intellectual Property Law Association to print this document. I am an employee of Counsel Press. On the 17th day of January, 2013, I served the within Brief for Amicus Curiae upon the following counsel for the parties in the appeal:

David M. Krinsky dkrinsky@wc.com Williams & Connolly LLP 725 12th Street, N.W. Washington, DC 20005 Tel: (202)434-5000 Fax: (202)434-5029 Counsel for Defendant-Appellant Alice Corporation Pty. Ltd

Mark A. Perrymperry@gibsondunn.com Gibson, Dunn & Crutcher LLP 1050 Connecticut Ave., N.W. Washington, DC 20036-5306 Tel: (202)887-3667 Fax: (202)530-9696 Counsel for Plaintiff-Appellee CLS Bank International and Counterclaim Defendant-Appellee CLS Services Ltd.

via Express Mail, by causing 2 true copies of each, enclosed in a properly addressed wrapper, to be deposited in an official depository of the U.S. Postal Service. Additionally, Counsel for Amici Curiae currently appearing, or that counsel knows will appear, will been sent a courtesy copy of the brief via email. Unless otherwise noted, 31 copies have been hand-delivered to the Court on the same date as above. January 17, 2013 __________________ John C. Kruesi, Jr.

19

Counsel Press

CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION, TYPEFACE REQUIREMENTS AND TYPE STYLE

REQUIREMENTS

1. This brief complies with the type-volume limitation of Federal Rule of Appellate Procedure 32(a)(7)(B).

x The brief contains 4,145 words, excluding the parts of the brief exempted by Federal Rule of Appellate Procedure 32(a)(7)(B)(iii),or

The brief uses a monospaced typeface and contains lines of

text, excluding the parts of the brief exempted by Federal Rule of Appellate Procedure 32(a)(7)(B)(iii).

2. This brief complies with the typeface requirements of Federal Rule of Appellate Procedure 32(a)(5) and the type style requirements of Federal Rule of Appellate Procedure 32(a)(6).

x The brief has been prepared in a proportionally spaced typeface using MS Word 2007 in a 14 point Times New Roman font or

The brief has been prepared in a monospaced typeface using

________ in a ___ characters per inch_________ font. January 17, 2013 (s) Date Name: Jerry R. Selinger

Attorneys for Amicus Curiae The American Intellectual Property Law Association

20