2. Test for patentability of abstract ideas: Implicit exception to exclusion

Abstract ideas are not patentable generally because allowing them to be patented would grant a monopoly over the ideas, which would impede rather than encourage innovation. In Mayo, the Court reiterated the long-standing rule that "laws of nature, natural phenomena, and abstract ideas" are not patentable. (Mayo Collaborative Services v. Prometheus Laboratories, Inc., supra, 132 S.Ct. 1289 at 1293, quoting Diamond v. Diehr (1981) 450 U.S. 175, 185 [101 S.Ct. 1048, 67 L.Ed.2d 155].) The Mayo decision cited a long list of cases supporting this proposition, extending back to O'Reilly v. Morse (1854) 56 U.S. 62 [15 How. 62, 112-120, 14 L.Ed. 601].) The Court looks for an "inventive concept" that transforms the material at issue into something "significantly more than a patent upon the natural law itself." (Id. at 1294, citing Parker v. Flook (1978) 437 U.S. 584, 590, [98 S.Ct. 2522, 57 L.Ed.2d 451].)

The Court applied the fundamental-truth test elucidated in Le Roy v. Tatham to the patents at issue in Alice. (Le Roy v. Tatham (1853) 55 U.S. 156 [14 How. 156, 174-175, 14 L.Ed. 367].) The results indicated to the Court that Alice claims were based on the abstract idea of intermediated settlement, which is "a fundamental economic practice long prevalent in our system of commerce." (Bilski v. Kappos (2010) 130 S.Ct. 3218, 3231 [177 L.Ed.2d 792].)

The Court then applied the Mayo transformation test and found no "inventive concept" sufficient to transform the abstract idea underlying the Alice patents into something that would be eligible for a patent: "A claim that recites an abstract idea must include 'additional features' to ensure 'that the [claim] is more than a drafting effort designed to monopolize the [abstract idea].'" (Alice Corp. Pty. Ltd. v. CLS Bank Int'l, supra, 134 S.Ct. 2347, 2357, quoting Mayo Collaborative Services v. Prometheus Laboratories, Inc., supra, 132 S.Ct. 1289, 1291.) The Court then cited its decision in Gottschalk v. Benson, which involved a patent claiming an algorithm implemented on a "general-purpose digital computer." (Gottschalk v. Benson (1972) 409 U.S. 63, 64 [93 S.Ct. 253, 34 L.Ed.2d 273].) The Benson claim failed to provide a "new and useful" application of the idea represented by the algorithm, which would be required for the idea at issue to be eligible for a patent. (Ibid.)

The Court contrasted its decision in Benson with the finding in Diamond v. Diehr, which involved a patent for a rubber-curing process. The Diehr process was eligible for a patent despite running on a conventional computer because it relied on a thermocouple to achieve a goal previously unattained by the industry: the ability to record constant temperature measurements inside a rubber mold. (Diamond v. Diehr, supra, 450 U.S. 175, 178-79.)

In Alice, the claims converted the well-established concept of intermediated settlement to a generic computer, which the Court ruled was insufficient to transform the underlying abstract idea into a patent-eligible invention. (Alice Corp. Pty. Ltd. v. CLS Bank Int'l, supra, 134 S.Ct. 2347, 2357, quoting Mayo Collaborative Services v. Prometheus Laboratories, Inc., supra, 132 S.Ct. 1289, 1299.)

c. 35 U.S. Code § 102 - Conditions for patentability; novelty, prior art