A case before the U.S. Supreme Court earlier this week could have a huge impact on business-method and software patents, with some experts concerned that the court could put significant limits on what can be patented.
The court heard oral arguments this week in Alice v. CLS Bank, with justices wrestling with a question of where to draw the line between which business methods running on a computer are patentable and which are too obvious to be patented.
The long-running patent case, which forced a splintered 10-judge decision at the U.S. Court of Appeals for the Federal Circuit, is a complicated one, with some patent experts saying they expect the court to attempt to clarify patentability rules, but most unsure of what those rules will look like.
Some experts, including the lead lawyer for patent owner Alice, have suggested that the Supreme Court could essentially wipe out software and business-method patents if justices rule broadly in the case, but many patent attorneys expect the high court to take a less sweeping approach.
After the Supreme Court, in a 2010 case called Bilski v. Kappos, declined to set a hard definition of which computerized business methods are patentable, many patent experts expect the high court to attempt to craft clearer rules. The Supreme Court in the Bilski ruling encouraged lower courts to come up with a patentability test, but instead, the Federal Circuit delivered a fractured decision on the Alice case.
U.S. courts have wrestled for years with questions about whether software and business methods should be patentable, and if so, where the line should be. U.S. patent law gives little guidance, with Section 101 of Title 35 of U.S. Code saying that patentable inventions include any "new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." The invention has to be original and cannot be obvious, but the code contains few other limits on what can be patented.
In the Alice case, the Supreme Court has a range of options; it could invalidate Alice's patents and leave patent law alone, and on the other end of the spectrum, it could throw out software and business-method patents, said Matt Levy, patent counsel at trade group the Computer and Communications Industry Association. However, the court is "extremely unlikely" to throw out those two categories of patents, he said.
Many of the groups filing briefs in the Alice case asked the court for more certainty, and it seems likely to attempt to write a clearer rule.
"The big problem now is that we really don't know where to draw the line at all," Levy said. "If we have a piece of software, or a software invention, there's no easy way to tell which side of the line it's on."
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