Alice Corp. v. CLS Bank Int’l (13-298)

argument 13-298

Alice Corp. v. CLS Bank Int’l

Supreme Court of the United States 59 min 5 speakers 8 chapters transcribed 6 days ago official recording ↗

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What is the central dispute between Alice Corp. and CLS Bank in this Supreme Court argument?

John G. Roberts 0:00

We'll hear argument this morning in case thirteen two ninety eight, Alice Corporation versus

David L. Phillips 0:05

CLS Bank International. Mr Phillips. Thank you, Mr. Chief Justice, and may it please the court. It is common ground between the parties in this case that Section one oh one, by its terms and with the sweeping interpretation this court adopted in Bilski applies directly to the patents here. These are system and process patents that uh speak directly to Section one hundred one. The only issue then is whether the judicially recognized exception that uh this court adopted many, many years ago applies under these circumstances. Just repeat it is common ground. Between the parties. That that that our n our patents speak directly to the language of Section one hundred one. That is, they are a process and they are machines and they are and they are improvements to the process and the machines.

David L. Phillips 0:50

I they don't they don't dispute that by its terms one oh one applies. The only argument between the parties is the abstract idea exception that exists and whether that bars us from otherwise satisfying Section one oh one.

Elena Kagan 1:04

Mr Phillips on on the abstract idea You know that the Bilski case held at hedging. qualified as an abstract idea. So how is Intermediate settlement. A less abstract. and edgy.

David L. Phillips 1:25

I don't really know exactly what that means, because I don't think that's the same kind of economics, basic economics concept that uh hedge risk uh uh treatment is. But if it claimed that, we wouldn't we wouldn't have a distinction from Bilski. What we claim is a very specific way of dealing with a problem that came into being in the early nineteen seventies of how to try to eliminate the risk of non settlement in these very massive multi party uh problems in which you need to deal with uh difficulties that exist in different time zones simultaneously and to do it with a computer so that you not only take them on chronologically, deal with them sequentially, based on the kind of software analysis that the patent specifically describes by function.

David L. Phillips 2:13

And goes even further than that and does something that that no escrow agent and and no intermediated settlement that I know settler that I know of, it actually blocks specific transactions that in the shadow account would violate the terms of the settlement that are ultimately the same.

Anthony M. Kennedy 2:29

If you describe that to uh a s a second year college class in engineering. And said, Here's here's my idea. Now you you go home and you progr program over this weekend. My guess is my guess is But that would be fairly easy to program. I'm not sure if you're not sure.

Anthony M. Kennedy 2:55

But the the but the innovative aspect is certainly not in the creation of the programme to make that work. All you're talking about is If I can use the word an idea.

David L. Phillips 3:05

Anthony M. Kennedy 3:05

prefer

David L. Phillips 3:06

not to use that word for obvious reasons. But but if you but if you look at the solicitor or or or or a or a method or a process. Right. But and and obviously methods and processes are precisely what Section one hundred one Why is that less abstract? I am

Stephen G. Breyer 3:20

sorry. Why is that less abstract? Imagine King Tut sitting in front of the pyramid where all his gold is stored. And he has the habit of giving chits away. Good for the gold. Which is given at the end of the day. And he hires a man with an abacus. And when the abacus keeping track sees that he's given away more gold than he has in storage, he says, Stop! You say? Or my mother who used to look at my cheque book, when she saw that in fact I'd written more checks than I had in the account, she would grab it. Стоп. You see, so what is it here that's less abstract that the computer says Stop. How is that less abstract than King Tot? If we had the same thing with a grain elevator, if we had the same thing with a reservoir of water, if we had the same thing with my checkbook, you see the point.

David L. Phillips 4:13

I do see the point, Justice Breyer. And it seems to me it goes to the question of the methodology you are going to employ.

Stephen G. Breyer 4:18

Methodology is as you said, stop. So what we have different here is the computer stops rather than the abacus man stopping, or my mother stopping, uh or uh the uh guy that the grain elevator has that says stop.