Supreme Court Limits (but Doesn’t End) Software Patents

Just adding a computer to an idea doesn’t mean it’s patentable, the court rules.

  he Supreme Court will begin hearing oral arguments on the President Obama's health care reform bill in Washington The United States Supreme Court is seen one day before the court will begin hearing arguments on the constitutionality of President Barack Obama's health care reform bill, in Washington on March 25, 2012. UPI/Kevin Dietsch    
National Journal
Brendan Sasso
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Brendan Sasso
June 19, 2014, 8:37 a.m.

A un­an­im­ous Su­preme Court nar­rowed the reach of soft­ware pat­ents Thursday. 

The Court ruled that simply in­volving a com­puter in an idea doesn’t mean it’s pat­entable. The justices tossed out sev­er­al pat­ents be­long­ing to Alice, an Aus­trali­an fin­an­cial ser­vices com­pany, and the rul­ing could in­val­id­ate oth­er sim­il­ar pat­ents.

But the Court didn’t go as far as many pat­ent crit­ics had hoped, de­clin­ing to strike down all soft­ware pat­ents. Crit­ics ar­gue that a rise in lit­ig­a­tion (es­pe­cially over soft­ware pat­ents) is sup­press­ing in­nov­a­tion and lim­it­ing con­sumers’ ac­cess to tech­no­logy.

The Su­preme Court has long ruled that “ab­stract” ideas are gen­er­ally not pat­entable. Alice’s pat­ents covered a com­puter sys­tem for fa­cil­it­at­ing fin­an­cial trans­ac­tions. CLS Bank chal­lenged the pat­ents, and the high court agreed that a pat­entable in­ven­tion must do more than just add a com­puter to an oth­er­wise ab­stract idea.

“Merely re­quir­ing gen­er­ic com­puter im­ple­ment­a­tion fails to trans­form that ab­stract idea in­to a pat­ent-eli­gible in­ven­tion,” Justice Clar­ence Thomas wrote for the Court.

Google, Face­book, Amazon, and oth­er tech­no­logy gi­ants had urged the Court to is­sue a broad rul­ing against soft­ware pat­ents. In a brief to the Court, the com­pan­ies wrote that ab­stract soft­ware pat­ents “have be­come a plague on com­puter-re­lated in­dus­tries.” 

Oth­er com­pan­ies, in­clud­ing Mi­crosoft and Adobe, agreed that the Court should throw out Alice’s pat­ents, but warned against a sweep­ing blow against all soft­ware pat­ents. Those com­pan­ies said the Court had no reas­on to “risk the po­ten­tial un­cer­tainty and un­fore­seen im­pacts” by ad­dress­ing the pat­entab­il­ity of all soft­ware.

Ul­ti­mately, the Court was care­ful to craft a nar­row rul­ing. Thomas wrote that “many com­puter-im­ple­men­ted claims are form­ally ad­dressed to pat­ent-eli­gible sub­ject mat­ter,” but the Court offered little guid­ance on what kinds of soft­ware pat­ents might still be val­id.  

The rul­ing comes after the Sen­ate aban­doned le­gis­la­tion to crack down on “pat­ent trolls” — firms that file frivol­ous pat­ent claims to ex­tort set­tle­ments out of com­pan­ies. Many tech com­pan­ies ar­gue that pat­ent trolls have be­come a drain on the eco­nomy.

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