Supreme Court Makes Software Patents on Abstract Ideas Invalid

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The issue of software patents had clearly spiraled out of control in the last decade or two, with companies rushing to get even the slightest tweak or addition in software covered by patents. The situation, however, may move towards normalcy now as the Supreme Court of the US has unanimously ruled that simply sticking an abstract idea into a computer does not make it valid for a patent claim. The decision is of immense significance for tech companies who were either cashing in on infringement of vague software patents, or those that were suffering at the hands of such companies.

The Case that Led to the Long-Awaited Decision

The Supreme Court’s ruling came in response to the legal battle between major financial institution Alice Corp and CLS Bank International, who had been sparring in court over the issue of a series of patents held by the former that covered the computer-implemented system of financial hedging. Alice Corp accused CLS Bank of infringing its patents, while the latter contended that the concept did nothing more than add a computer to a generic financial process. After listening to the arguments of both the parties, the court reached the decision with a 9-0 count that Alice Corps’ claim of inventing an original and unique system for intermediated settlement was merely an abstract concept being applied through a computer and therefore not patentable. It held that companies can’t simply stick an abstract idea into a computer and claim a software patent for it.

A Big Blow to the Patent Trolls

The verdict of the Alice Corp vs CLS Bank case has set a precedent for future litigations involving infringements of vague software patents. Major tech companies such as Google, Facebook and Netflix have hailed the decision. They had been concerned about the growing plague of abstract software patents in the computer industry since a long time. According to them, some firms were focusing on building patent portfolios and generating licensing fee through them instead of inventing actual products. When refused the sort of royalties that they were looking for, they’d approach the court and initiate lawsuits against the alleged offender. Termed patent trolls by their detractors, these firms had been abusing the law to pester other companies using abstract software patents. However, the Supreme Court’s decision will bring about a positive change.

The Patent Wars Are about to Get More Interesting

There is a lot of excitement following the Supreme Court’s ruling invalidating abstract software patents. However, it is important to note that even with the involvement of an abstract idea in an invention; the latter may still be covered by patent as long as there are obvious improvements in the software. That being said, the verdict is likely to have an impact on future patent litigations and more importantly help the US Court of Appeals for the Federal Circuit handle such issues better. Furthermore, it may also affect the patent war between Apple and Samsung, with the onus shifting to the iPhone maker to prove that some of the software patents that it’s accusing its South Korean counterpart of infringing are more than just abstract software patents. Let’s not forget that the legal battle between the two also involves various hardware and design patents, thus making it unlikely that the matter would be resolved more quickly.

When technology is involved, things are hardly as simple and clear as they seem. Even with Supreme Court’s verdict on abstract software patent, there are various issues that are likely to surface in the future, such as the method for determining what qualifies as an abstract idea and what’s actually technical innovation.

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