Supreme Court Narrowly Limits Business Method Software Patents
NEWS ANALYSIS: The decision that a company cannot patent business method software is not as groundbreaking as it may seem because the Supreme Court intentionally limited its application.The U.S. Supreme Court's long-anticipated decision on an important software patent case turned out to be something less than many hoped, but it is still important. The Supreme Court decided on June 19 that the patent for computer software designed to implement a settlement risk protection method was not patentable. As such, the case didn't strike down all software patents, nor did it eliminate business method patents. However, the Supreme Court determined non-patentable methods didn't become patentable when they were turned into software. In this case, the Supreme Court found that the idea of protecting one's self from risk by using a third-party (for example, an escrow) was both an abstract idea and not a new idea. Patent law explicitly excludes patents for abstract ideas, and it excludes patenting things that existed before the patent was filed. In this case (Alice Corp. v. CLS Bank), the bank was using a computerized escrow system to mitigate risk during money transfers. Alice Corp. sued the bank for infringement. The Supreme Court decided unanimously that the patent was not valid.
Justice Clarence Thomas was very clear in writing the court's opinion on the case. "We hold that the claims at issue are drawn to the abstract idea of intermediated settlement, and that merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention."