Supreme Court limits software patents

[JURIST] The US Supreme Court [official website] ruled [opinion, PDF] unanimously Thursday in Alice Corporation v. CLS Bank International [SCOTUSblog backgrounder] that an abstract idea is not patentable simply because it is tied to a computer system. In this case, Alice Corp. sued CLS [corporate websites] for patent infringement of four of its patents: US Patent Numbers 5,970,479 (the '479 patent), 6,912,510 (the '510 patent), 7,149,720 (the '720 patent) and 7,725,375 (the '375 patent), which cover a computerized trading platform for currencies. CLS argued that the ideas were too abstract to be patentable. The district court granted summary judgment for CLS, and the US Court of Appeals for the Federal Circuit, sitting en banc, agreed [JURIST report]. In an opinion by Justice Clarence Thomas, the Supreme Court affirmed:

The patents at issue in this case disclose a computer implemented scheme for mitigating "settlement risk" (i.e., the risk that only one party to a financial transaction will pay what it owes) by using a third-party intermediary. The question presented is whether these claims are patent-eligible under 35 USC §101 [text], or are instead drawn to a patent-ineligible abstract idea. We hold that the claims at issue are drawn to the abstract idea of intermediated settlement, and that merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.
Justice Sonia Sotomayor filed a concurring opinion, joined by Justices Ruth Bader Ginsburg and Stephen Breyer.

The court heard arguments in the case in March after granting certiorari [JURIST reports] in December. JURIST Guest Columnists Peter Brann, David Swetnam-Burland and Stacy Stitham of Brann & Isaacson recently discussed the impact of this case on retailers [JURIST op-ed].

 

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