SCOTUS Curbs Software Patents

SCOTUS Curbs Software Patents

One of three unanimous decisions announced today by the Supreme Court. USAToday:

WASHINGTON -- You take an idea that's not all that original and implement it on a computer. For that, the Supreme Court ruled unanimously Thursday, you don't deserve a patent.

Seeking to do its part to trim the proliferation of software patents, the high court nevertheless tread carefully to avoid ensnaring too many legitimate business patents along the way.

The case had attracted legions of lawyers on both sides to the high court's chamber in March, as well as hundreds of pages of briefs from the likes of Google, Microsoft and IBM. Many had urged a solution similar to what the justices sought to devise Thursday: a reduction in flimsy patents without affecting the deserving ones.

The specific patent in question uses a computer to safeguard complex financial transactions, largely among banks. The program is intended to reduce the risk that one party can't hold up its end of the deal.

Justice Clarence Thomas, writing for the entire court, ruled that the third-party settlement concept is an 'abstract idea," and using a computer to implement it "cannot transform a patent-ineligible abstract idea into a patent-eligible invention."

Sounds simple, but the case, Alice Corp. v. CLS Bank International, posed huge risks for both sides. If the court upheld the patent, the problem of proliferation -- including patent lawsuits -- would continue. The number of software patents granted annually has soared from about 2,000 in 1980 to more than 40,000, accounting for nearly half of all patent lawsuits in recent years.

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