Supreme Court Narrowly Limits Business Method Software Patents

By Wayne Rash  |  Posted 2014-06-19 Print this article Print

"This should embolden or enable some people who are targets of trolls," Black noted. "The problem is that it doesn't matter as much as it should whether the patent is good."

Black explained that, in many cases, businesses would rather pay off a troll instead of fighting a patent infringement suit, if only because of the expense of defending against an infringement suit. He noted that trolls will likely keep sending their demand letters, regardless of the decision.

"It's going to have its greatest impact on some business method patents. This case will make it harder to make a technological case," said Gregory Stobbs, a patent lawyer with Harness, Dickey and Pierce in Troy, Mich. Stobbs noted that the Supreme Court looked at the Alice patent as a whole, rather than strictly looking at whether it was an abstract idea or, for that matter, a new idea. He said that in addition to looking at the patent as a new idea, the Supreme Court considered novelty and obviousness as criteria.

While the decision didn't invalidate software patents, especially software for business methods, "it certainly doesn't help software patents much," said Case Collard, an IP litigator for the law firm of Dorsey and Whitney in Denver. "Businesses are going to have to struggle. They have to have a novel piece."

So if the Alice v. CLS decision doesn't invalidate software patents or business process patents, what did it do? The opinion shows that the Supreme Court's goal was to make it clear that a patent that's overly broad, extremely vague or that makes claims about ideas that wouldn't normally be patentable doesn't become patentable just because it's encoded in software on a generic computer.

"If you do apply that methodology to computer claims, then it raises questions about implementing ideas on a generic computer," said John Murphy, who practices intellectual property litigation at Baker Hostetler in Philadelphia.

"The Supreme Court leaves a big door open," he said. "Part of the reason this claim failed is because it was simply implementing this in a generic sense. They made the observation it did not improve the operation of the computer itself, or any other technology." Murphy also noted that had the patent claimed to improve the computer or its operation in some way, the decision might have been different.

Murphy said that because the decision was written narrowly, it does not prejudge some cases. "But it does prejudge some business method cases," he said. "If the invention is about something that just happens to be on a computer, that's not a good position."


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