While some software patents survive the SCOTUS ruling in the Alice v. CLS Bank case (notably in banking), many software patents are being invalidated and applications fail (not many software patents are being granted, despite 92% of all patent applications ending up being granted as rubber-stamped patents). Existing holders of software patents may be reluctant to sue, knowing that any lawsuit may deem these patents invalid and hence incapable of imposing the signing of patent deals or serve as deterrents. As Timothy B. Lee put it the other day:
The patent office is rejecting a lot more software patents
A June Supreme Court decision on the legality of software patents has been sending shockwaves through the legal system. The case, called Alice v. CLS Bank, has led to a bunch of lower court decisions invalidating software patents. It may also have been responsible for September's sharp decline in patent lawsuits.
The decision appears to be having another effect that could be even more important in the long run: it's causing the patent office to reject a lot more patents on "business methods," a category of software patent that is notorious for its high litigation rate. While that might be bad news for the people seeking these types of patents, it means that there could be a lot fewer patent troll lawsuits over the next two decades.
Plaintiffs filed 329 new federal patent cases in September 2014, a 40% decrease from the 549 cases filed in September 2013.
After reaching a record high of 675 new cases filed in April 2014, filings over the last five months have tailed off significantly (see Figure 1).
Month-over-month comparisons of 2014 and 2013 reveals lower 2014 monthly totals since May (see Figure 2).
In a June decision called CLS Bank v. Alice, the Supreme Court called into question the validity of many software patents. Since then, there have been over a dozen lower-court decisions invalidating software patents.
New data from the legal analytics firm Lex Machina suggests that the newfound judicial hostility toward software patents is making plaintiffs gunshy:
Patent lawsuits in September were down 40% from last year