Alice v. CLS ruling

On June 19, the Supreme Court released its ruling in the Alice v. CLS Bank. I had discussed the case and the larger debate about software patents in an earlier blog post. I won't go into the details of the case that have already been discussed.

The Court affirmed the Federal Circuit decision and invalidated the claims under Section 101. I explained in an earlier blog post that Section 101 (patent cannot be abstract) is the easy way to kill a patent because it does not require expensive search for prior art (novel) or expert testimony (non-obvious).

Justice Thomas wrote, for the Court opinion:

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.

This interpretation is well-established by Court precedent dating back to the patent trilogy of Gottschalk v. Benson (1972), Parker v. Flook (1978), and Diamond v. Diehr (1981), as well as in the Court's more recent decisions in Bilski v. Kappos (2010) and Mayo v. Prometheus (2012). Thus, Thomas concludes:

These cases [Mayo, Flook, Benson, and Diehr] demonstrate that the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention. Stating an abstract idea "while adding the words 'apply it'" is not enough for patent eligibility.

Interestingly, despite this case being a landmark in the software patent debate, not once is the word "software" mentioned in the decision! I assume the Court is deliberately refraining from banning "software patent" outright. This may limit the impact of the decision as it gives more flexibility to the lower courts (e.g., the Federal Circuit). Nonetheless, for opponents of software patents and those who seek to limit them, this decision is great news.

Gene Quinn of IPWatchDog, a patent lawyer that I debated against, and vocal proponent of software patents, angrily wrote in response:

In what can only be described as an intellectually bankrupt opinion...[the decision] will render many hundreds of thousands of software patents completely useless....On first read I don’t see how any software patent claims written as method or systems claims can survive challenge...What this means is that companies like Apple, IBM, Microsoft, Google and others have had the value of their patent portfolios nearly completely erased today...their patent portfolios have been decimated...Most already issued software patents will not be able to be saved.

I think that's a little far-fetched. The decision only invalidates patents of the same form, namely abstract idea + "on a computer", such as the "stupid patent" I discussed earlier. It less clear regarding patents that "improve the functioning of a computer" -- some interpret that as allowing those patents, while others interpret that as not taking a stance.

The End Software Patents wiki has an article that cites and discusses different interpretations of the decision.