Supreme Court: Computer-Implemented Abstract Ideas Were Not Patent Eligible

Today, the Supreme Court issued its highly anticipated decision limiting the scope of software patents in the case of Alice Corporation v. CLS Bank. In the opinion, a unanimous court held that the patent claims involved the abstract concept of intermediary settlement, and that implementing this idea on a generic computer did not add anything new or innovative that would make the idea patentable.

As a patent attorney, I like to read the court’s opinion myself rather than relying on news reports. I did that with this decision too, making notes and annotations on the PDF, and then adding a hyperlinked table of contents to jump to key sections of the opinion. You can download my PDF of the annotated opinion here or by clicking on the image of the table of contents below.

In my view, this decision will significantly limit the use of patents to protect software, and it will lead to the invalidation of many previously-issued software patents. I believe that most software patents will fail the two part test articulated by the court. On part one of the test, many software patents can be reduced to an “abstract idea” as was the maintenance and settlement of accounts at issue in this case. On the second part of the test, I believe that it will be difficult to show innovative concepts in the implementation of such abstract ideas on a computer. (Of course, this will all take years to work out, and it will greatly depend upon how the Patent Office and the courts interpret this decision.)

I created the annotated PDF using some of the tools that we use at Cogent Legal to make e-briefs. I hope you find the annotated opinion useful. If you want to read more about e-briefs, check out previous e-brief posts on our blog at this link. Please email me if we might help you with e-briefs for your case.