Welcome back to Legal Geek. This week, we continue our review of recent Supreme Court decisions affecting the tech world by analyzing the decision in Alice Corp. v. CLS Bank.
Like many Supreme Court cases, including the copyright case covered last week, a primary issue is whether the resulting ruling will affect more than just the narrow facts at hand in the case. For the Alice case, the simple question was whether a patent claiming a computerized trading platform for eliminating settlement risk in financial transactions was patentable subject matter. The broader question was whether software patents are actually patentable subject matter.
As is typical in the decisions, the Supreme Court answered the facts at hand and did not address the broader issue, likely leaving the big question of software patents to be decided by Congress rather than the courts. Thus, the reports that software patents were greatly curtailed by this decision are simply false.
The use of a third party in financial transactions to eliminate settlement risk was deemed by a unanimous court to be what is called merely an Abstract idea, in other words a well known principle or building block of economic practice. Moreover, the claims that add generic computer system elements to perform the methods were ruled to not be patentable subject matter either.
Put simply, a patent attorney cannot merely wordsmith claims and add simple elements to make a non-patentable Abstract Idea into a valid patent claim. Again, from a common sense perspective, the Supreme Court has acted logically in stopping gamesmanship based solely on wording of claims rather than substance.
However, the Court made it abundantly clear by comparisons to previous Abstract Idea cases that this analysis has not changed, it was merely applied to the facts in this case. Thus, software patents in the broad sense are still as patentable as they have always been, and that legal field will continue to thrive.
Bottom Line: If software is to be deemed non-patentable subject matter, that decision will clearly not come from the Supreme Court. The standards will remain fuzzy as a result of the nature of software, but there is good innovation there and the courts and Congress are not likely to take away the patent rights to this entire field.
Thanks for reading. Please provide feedback and legal-themed questions as segment suggestions to me on Twitter @BuckeyeFitzy or in the comments below.
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