TECHRIGHTS has chronicled the post-Alice aftermath and the demise of software patents in the United States for well over a year. We wrote about the subject dozens of times and gave examples of cases that demonstrate change, both at the courts (rulings against patents) and at the patent office (examination guidelines being tightened).
Courts Everywhere are Finding Software Patents Invalid, So What Next?
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The Supreme Court’s June 2014 ruling in Alice v. CLS Bank calls into question the eligibility for patent protection of these issued utility patents on computer software, and is a barrier to future applications on computer software. Alice and its progeny compel software developers to look beyond patents to protect their intellectual property. What are these alternatives? When and how can they be used?
In Alice, the Supreme Court found that an issued patent protecting high frequency trading software was invalid because it was directed to patent ineligible subject matter. Unfortunately, the Court provided little or no direction as to how to determine patent ineligibility. The Court said that a “patent-ineligible concept” is “an abstract idea.” So the natural next question must be: What is an abstract idea? The Court defined “an abstract idea” as “[a]n idea of itself,” or one that is “a fundamental truth.”
With the issued patent challenged in Alice, the Court used this definition to deem them directed to an “abstract idea” and therefore patent ineligible. But the Court did not explain how the patented claims were “drawn to the abstract idea of intermediated settlement” in the high frequency trading software realm. The Court did not pinpoint what fundamental truth the patents purported to protect such that they were ineligible.