By Sharon Tasman Prysant | December 07, 2013 at 03:22 PM EST | No Comments
On Friday, December 6, 2013, the Supreme Court of the United States agreed to hear the appeal of the case Alice Corporation Pty. Ltd. v. CLS Bank International (docket 13-298). At issue in the case is whether claims for computer-implemented inventions – including claims to systems and machines, processes, and items of manufacture - are appropriate subject matter for patents.
In May 2013, the US Court of Appeals for the Federal Circuit ruled that Alice Corporation's patent on computer software which contained a method of using "shadow accounts" in foreign currency exchange was essentially just an abstract method that was not entitled to patent protection. Alice Corporation has appealed that ruling.
As many in the industry know, there has long been a battle brewing over the patentability of computer software and business methods. At issue is Section 101 of the Patent Act, which broadly defines what kinds of inventions are patentable. One of the long-standing exceptions to the types of inventions mentioned in that section is that an abstract idea can never be patented. However, the concept of abstract ideas arises frequently in computer software and business methods.
Many Justices on the Supreme Court have long been skeptical about software patents, and there has been confusion in the lower courts. Hopefully, with the Alice Corporation case, the Supreme Court will bring a measure of clarity to the enforceability of computer software and business method patents.
For many software companies, this could be a "do or die" moment - the ability to block competitors via patent rights.