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Future Of Software Patents In Doubt After Supreme Court Decision Last Year

February 24, 2015 - Written By Jeremiah Nelson

Software patents and the U.S. patent system could be seeing more major changes after the U.S. Supreme Court ruled on a software patent case last summer. The case, Alice Corporation v. CLS Bank International , ended with the Supreme Court telling lower courts to take a closer look at “computer-implemented abstract methods” according to a recent piece on TechCrunch. The two companies involved in that case had some software that was being used to settle their books at the end of a day of trading.

“In Alice, a unanimous Supreme Court invalidated a software patent that related to a computer-implemented method that would help ensure that two financial institutions involved in multiple trades could settle up their accounts on a daily basis. Because Alice involved a computer-implemented method to a financial process, it implicated two hot-button patent policy issues: the ongoing debate over the extent to which business-method patents should be viable under U.S. patent law and how much protection software patents should receive under U.S. patent law.” Basically the computer software in use was ruled to be un-patentable, as was the processes that the software used to complete its calculations. This ended up having far reaching implications that nobody saw coming.

The ruling in the Alice v. CLS case ruling is being used to invalidate software patents on complex computer-implemented processes. Some companies are finding that they can no longer claim patents on software and computer-methods that they had previously held patents on. “The Federal Circuit invalidated a patent dealing with the storage of device-specific profiles, a patent on a system that provided online purchase guarantees, and a patent involving an online system of delivering content with embedded ads in quick succession,’ Sid Venkatesan says over on TechCrunch. And the fallout from the Alice case is only beginning.

Companies may find themselves holding invalid patents, and they are going to find that the value of their valid patents may drop. “Companies looking to file new patents will have to think critically about whether their inventions will pass the “abstract idea” test and should prepare themselves for more aggressive push-back from the USPTO on software patents. Thus, no matter where you sit, it is time to take stock of what you have and where your IP roadmap is headed,” Venkatesan recommends. Hit the source link below and head over to TechCrunch to read the full article.